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Better Than Expected, Barely Good Enough: Profits And Stocks
The seasonal trend is for stocks to go soft during the summer ... especially, August. From what I have read, this seems to be so more times than not. I'm not surprised that earnings need to catch up with valuation. Stocks are not cheap as the article points out. I'm looking for a fall stock market rally and I'm thinking there needs to be a pullback (of sorts) for stocks to rally off of.
At the first of the year my thinking (and call) was that sometime during 2017 the S&P 500 Index would reach 2475 (or thereabouts). It's done that. Now, I'm thinking that the Index might do 2550 before year end (or thereabouts) if Congress can get it's act together in the near term and earnings continue to meet (or exceed) expectations. Will the Federal Government have to shut down due to the debt ceiling and/or lack of budget approval? What a way to run things. I'm thinking this is something that needs a fix along with healthcare and tax reform.
"The seasonal trend is for stocks to go soft during the summer ... especially, August."
Just off-the-cuff (without further research) I'd tend to agree. Some of the worst stock market sell-offs seem to have occurred in late summer or early fall. The '29 crash, the '07-'09 debacle, and a one-day drop of more than 20% in '87. However, unlike some, I would never risk being substantially underweight equities or largely absent from the markets out of some kind of observance of this historical pattern. To me there's just too big a risk of making an incorrect call and missing out on big gains.
Isn't investing interesting?
I'd agree Ol'Skeet. I consider that's a good reason to follow the postings at MFO and indulge in other financial print/electronic media. As you well know, however, there are some (well ... 1 in particular here) who profess to find the ebb and flow of markets of little no interest and who are content to "peek" at their investments only once or twice a year. Different strokes for different folks.
Comments
At the first of the year my thinking (and call) was that sometime during 2017 the S&P 500 Index would reach 2475 (or thereabouts). It's done that. Now, I'm thinking that the Index might do 2550 before year end (or thereabouts) if Congress can get it's act together in the near term and earnings continue to meet (or exceed) expectations. Will the Federal Government have to shut down due to the debt ceiling and/or lack of budget approval? What a way to run things. I'm thinking this is something that needs a fix along with healthcare and tax reform.
Isn't investing interesting?
Skeet