Published December 6, 2019
In this column, you have often heard me refer to the market climbing a wall of worry.
Surely, at this time, the market has a lot to worry about. Is that the reason the equity markets have climbed 20-30 percent year-to-date?
The slowing global economy, trade war with China, Brexit missteps, Hong Kong demonstrations and interest rates inverting have all been headline news and negatives for the U.S. economy and the stock market.
“Trade wars are good and easy to win,” opined President Trump, as he began the current dispute with China. With each passing month, we are told we are winning the trade dispute and that an agreement is at hand – even inches away, according to the White House – yet the dispute continues and in some cases worsens.
If you can count the outcome of the demonstrations in Hong Kong as a sign of winning against China’s control, then we should be optimistic. But political unrest in Hong Kong is threatening global stability.
Brexit also threatens disruption of the global economy, with the only solution offered being another general election in Britain; no consolation there.
The U.S. interest rate yield curve briefly inverted, so the Federal Reserve lowered interest rates again. Was that a solution or just another problem? Wherever one looks there is worry, and yet the U.S. equity market appeared strong with the S&P up 25.3% from Jan. 1, 2019, through Dec. 1, 2019. The Nasdaq was up 30.6% and the Dow Jones Industrials up 20.3% during the same time period.
The S&P added 3.4% for the month of November, while the Nasdaq gained 4.65% and the Dow 3.7% for the month. The S&P and […]