You decide! Today’s jobs announcement as reported by the Establishment Survey (CES) suggests a stark slowdown in new hiring compared to the average trend. Conversely, the Household Survey (CPS) seems to argue a continuum of the job growth story. Unquestionably, the overall employment expansion was stymied from the Government Shutdown. Also, I suspect C-Suite decision makers were digesting the aftershocks of the stock market’s Q4 market descent of nearly 20% and chose to tighten up on the growth reins until sentiment normalized. https://lnkd.in/gQJCicv
Retail sales fell -1.2% last month, the worst December of the economic expansion, online sales declined by -3.9%. CNBC, MarketWatch, Reuters, WSJ, NYT, and forecasters inferred and inked grim warnings about the contraction in consumer spending. I decided to take a closer look. Historically, when there’s palpable fear in the air, consumers tighten their belts. For example, during the great recession, when all news was shock and all, the personal savings rate doubled. Yes, it doubled from 3% to 6%. So, considering the -5.8% stock market decline in December, is it any wonder that consumers began monitoring their spending?
#PositiveNews Initial unemployment claims fell to 199,000, or 0.06% of the total U.S population. This is the lowest percentage of people applying for unemployment insurance in the report’s 52-year history. Simply, more Americans are working hard versus hardly working.
The secular bull market officially began on March 9, 2009, at 676.53 for the Standard & Poor’s 500 (SP500), the low point close of the horrendous ’08-’09 Great Recession. The stock market suffered its worst bear market since the 1930s; after peaking at 1,565.15 on October 9, 2007, the SP500 shed 888 points, erasing 56.7% of its value in 517 days. At the turn of the millennium, the index stood at 1,469.25; nearly a decade later, the index price was 54% lower. Owning stocks proved to be a costly and very painful exercise for investors during this period. Tuesday, March 10, 2009, the tide turned with the index increasing 6% on the trading session. The index rose 27% over the next 30 days and closed 66.8% higher at year’s end. Stock prices were stabilized and lifted by aggressive monetary policy. The Federal Reserve implemented ZIRP (zero interest rates) and Quantitative Easing in QE 1, 2, and 3, which entailed large scale asset purchases of treasuries and mortgage-backed securities, to fend off deflation and further asset price reduction.
In reflection, it has been a heck of ride lasting 9 years and 5 months, if, September 20th’s 2,930.75 closing all-time high (ATH) ends up being the top. This long-term bull has set 211 ATHs along its charge and increased in value from $6.9 trillion to $26.1 trillion. As of this writing, the present correction has erased $4.3 trillion of those gains. There have been 2,402 trading sessions throughout, 1,324 up days and 1,078 down. Positive and negative days averaged .48% and -.41%, respectively. Thursdays proved to be the most profitable day of the week to be invested, netting .089% per trading day, with Fridays bringing up the rear at .034%.
Since 1928, the month of July has rewarded broad market participants an average of 1.3%, and continued its generous manner garnering shareholders a whopping 2.8% average gain all through the ’09 bull advance; March and April, likewise, have mirrored their historical results. January, normally a positive month for stocks over the past 90 years, has been undesirable during the ’09 bull.
The stock market may be shifting into an appropriate time to hang our stock certificates for Santa to still show. Since 1950, the last two weeks of the year have been quite generous to stockholders. No one is certain if this year will follow suit or not. It looks like it may be a fair time to cross our fingers, hang our stockings, and wish prosperity and good cheer to our family, friends, country, and ourselves too.