“In my whole life, I have known no wise people who didn't read all the time — none, zero.”
- Charles T. Munger (Vice Chairman of Berkshire Hathaway)
Happy Monday!
I spent most of the past four weeks in Atlanta and New York following up on several diligence efforts and observing an active market that still wants to “charge ahead”, but gets hung up periodically on geo-political and trade issues.
Overall the markets moved higher as bulls pushed the markets into record territory. Much of the move in the markets was squarely on the back of significant and overall positive macroeconomic data.
We were also many earnings beats across a number of sectors. As a result of this past month's reveals, we saw the S&P 500 close November very close to an all-time high at 3,134, and is now up +23.0% YTD.
The Dow rose this past month ending at 28,029 & is up 19.1% YTD and giving us the impression that the 28K level should hold firm and we will advance from here forward in December.
The Tech-heavy Nasdaq also closed at a near all-time high at 8,632 & is up 26.5% YTD. The Russell 2000 closed at 1,624, close to an all-time high and is up 15.6% YTD.
In the past month, significant economic data was revealed. The durable goods report, Services Purchasing Manager's Index report, and the University of Michigan's consumer sentiment report were all positive and have continued to drive this market higher.
In December we believe the markets will continue to respond with cautious enthusiasm. The political environment with 2020 campaigns in full swing and Impeachment at the forefront is vexing, to say the least. We read the market’s reaction to these events as being cautiously optimistic that things will work themselves out. While Impeachment may be in the cards for President Trump, it is unlikely that the Senate will convict and the market reads that as a positive event.
Another equally important market mover over the next few weeks will be the results of the US-China trade pact (Phase I) and how ambitious it turns out to be. Right now, there is hedging from both sides as they inch closer to announcing a deal, but it is clear to me that politically both sides need a deal … so look for some before the end of the year.
Thanks again for your consideration & for sharing your thoughts and ideas with us.
Have a wonderful holiday month ahead!
Best regards,
Vinnie
Vincent M. Odd
Managing Partner
PointFour Capital, LLC
vincent.oddo@pointfourcapital.com