FYI: The S&P 500 jumped Monday, on track to enter the fourth quarter with its biggest year-to-date gain in more than two decades.
The broad stock-market index has rallied 19% this year—its best performance in the first three quarters of a year since 1997. The advance comes alongside a rally in both bonds and commodities.
Investors battled concerns about trade and currency clashes between the U.S. and China, recession signals and, recently, political headwinds in the third quarter.
Meanwhile, meager returns world-wide—as the pile of negatively yielding debt swelled to more than $15 trillion—led investors to keep buying stocks.
The S&P 500 rose 0.50% Monday, lifted by shares of technology and health-care companies, as gains accelerated midday. The Dow Jones Industrial Average added 96 points, or 0.36%, boosted by shares of Apple, its biggest gainer. The Nasdaq Composite climbed 0.75%.
Many investors say they are bracing for more turbulence ahead. U.S. stocks ascended to record highs in July before being dragged down by worries about a recession. They’ve clawed back some of their losses as some of the fears that gripped markets in August have subsided and stock moves have grown more muted.
Though the S&P 500 is just an inch away from a fresh record, it has gained only about 2.3% over the past year and hasn’t moved much from its levels in January 2018.
Government-bond yields in the U.S. and Europe tumbled in August—with the 30-year U.S.Treasury yield touching a record low—before rising sharply again in early September. Currencies have also logged big moves, with the yuan dropping nearly 4% against the dollar this quarter, its weakest run since the second quarter of 2018.
So far, investors have turned to the U.S. dollar as fears about waning economic growth around the world have grown, betting that domestic growth is on a stronger footing. The U.S. dollar edged to its strongest level in over two years Monday against both the euro and a basket of currencies in the ICE dollar index.
For example, the U.S. consumer has been a bright spot for investors, but new data released last week showed that shoppers slowed spending in August just as businesses cut back on investment.
Data like this fuels concerns about a repeat of last year, when the S&P 500 soared ahead of the autumn before tumbling almost 20% through December.
Several other factors could spur volatility in coming months, analysts say. Investors have been monitoring political drama in Washington as lawmakers have proceeded with an impeachment inquiry against President Donald Trump.
This Friday, investors will get a glimpse of the latest monthly jobs figures, which could have wide-ranging implications for bond, stock and currency markets as well as the Fed’s next moves.
And in coming weeks, third quarter earnings are expected to show another period of lower profits. U.S. leaders will also meet with Chinese counterparts to discuss trade in October, and some investors are on edge for signs of a trade truce.
This unease has rippled through the bond market, with the 10-year Treasury yield on track for its biggest year-to-date decline since 2011 as bond prices have jumped. The benchmark flirted with a record low this quarter as other traditionally safe assets such as gold rallied to a six-year high.
The stock gyrations haven’t been limited to major indexes or assets. The last quarter was also marked by big moves within the S&P 500’s 11 sectors. In September, as investors grew more optimistic about the economy and U.S. stock market, they started selling out of some of the market’s biggest winners--so-called momentum stocks--and started scooping up shares of companies that appeared undervalued in the stock market.
For example, over the past month, shares of financials and energy companies in the S&P 500 have outperformed the broader gauge, jumping 4% and 4.7%, respectively. Year-to-date, they’ve underperformed the index.
Regards,
Ted
Bloomberg Evening Briefing:
https://www.bloomberg.com/news/articles/2019-09-30/your-evening-briefingMarketWatch:
https://www.marketwatch.com/story/us-stocks-set-to-open-higher-as-treasury-official-says-no-plans-to-ban-china-listings-on-us-exchanges-2019-09-30/printWSJ:
https://www.wsj.com/articles/global-markets-end-tumultuous-quarter-on-quiet-note-11569833596Bloomberg:
https://www.bloomberg.com/news/articles/2019-09-29/stocks-set-for-cautious-start-on-trade-tensions-markets-wrapIBD:
https://www.investors.com/market-trend/stock-market-today/stock-market-revives-on-china-investment-reversal-these-chinese-names-bounce-back/CNBC:
https://www.bloomberg.com/news/articles/2019-09-29/stocks-set-for-cautious-start-on-trade-tensions-markets-wrapReuters:
https://www.reuters.com/article/us-usa-stocks/apple-led-tech-rally-drives-wall-street-higher-idUSKBN1WF1AQU.K:
https://uk.reuters.com/article/uk-britain-stocks/ftse-100-lower-as-demand-worries-weigh-on-oil-majors-idUKKBN1WF0MQEurope:
https://www.reuters.com/article/us-europe-stocks/weak-euro-wall-street-rally-buoy-european-shares-idUSKBN1WF0MSAsia:
https://www.cnbc.com/2019/09/30/asia-markets-sept-30-china-pmi-budweiser-ipo-us-china-trade-currencies.htmlBonds:
https://www.cnbc.com/2019/09/30/treasury-yields-pmi-manufacturing-data.htmlCurrencies:
https://www.cnbc.com/2019/09/30/forex-markets-us-china-trade-war-in-focus.htmlOil
https://www.cnbc.com/2019/09/30/oil-markets-us-china-trade-war-in-focus.htmlGold:
https://www.cnbc.com/2019/09/30/gold-markets-us-china-trade-war-in-focus.htmlWSJ: Markets At A Glance:
https://markets.wsj.com/usMajor ETFs % Change:
https://www.barchart.com/etfs-funds/etf-monitorSPDR's Sector Tracker:
http://www.sectorspdr.com/sectorspdr/tools/sector-trackerSPDR's Bloomberg Sector Performance Pie Chart:
https://www.bloomberg.com/markets/sectorsCurrent Futures:
https://finviz.com/fut 
