"The idea that a bell rings to signal when investors should get into or out of the market is simply not credible. After nearly 50 years in this business, I do not know of anybody who has done it successfully and consistently." – John Bogle
Happy Monday!
I hope that all of you had a wonderful weekend and that you are enjoying the start of the new week ahead.
I spent the last 4 weeks mostly in both New York and Atlanta working in both the office and out in the field conducting diligence visits. The markets continued to rise along with the chess-like strategic moves of the US-China trade war saga. This past week the participants decided to play somewhat nice again & the markets reacted positively resulting in an extension of positive returns that have now proceeded for 8-straight trading days.
The markets picked up strength when President Trump extended an olive branch in the negotiations to the Chinese delaying raising tariffs from 25% to 30% on $250B of their goods from the original proposed date of Oct. 1 to Oct. 15. In fact, 3 of the largest indices have now advanced for 3-straight weeks. The Dow is now solidly above the 27k level and is even suggesting that it may try to exceed the 28k level by yearend...
We also saw President Trump tweet out the following “The USA should always be paying the lowest rate. No inflation! It is only the naivete’ of Jay Powell and the Federal Reserve that doesn’t allow us to do what other countries are already doing. A once in a lifetime opportunity that we are missing because of “Boneheads.” Please keep in mind that the Federal Reserve's rate decision is due out on Wednesday this coming week and the market still expects a rate cut...So the stage is set once again for yet another rate decision.
The S&P 500 proceeded to move higher by 1% this week closing above the 3k level at 3,007.39 & is back up 20% YTD. The Dow gained 1.6% ending solidly above the 27k level at 27,219.52 & is now up 16.7% YTD. The Tech-heavy Nasdaq gained .9% over the week to end at 8,176.71 solidly above the 8k mark & is up 23.2% YTD. However, the Russell 2000 jumped a whopping 4.8% this week ending at 1,578/14 and is up 17% YTD.
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Best regards,
Vinnie
Vincent M. Oddo
Managing Partner
PointFour Capital, LLC
vincent.oddo@pointfourcapital.com