The stock markets were up last week, as the Dow (+1.9%), the NASDAQ (+1.5%) and the S&P 500 (+1.5%) snapped a four-week string of losses. These gains came even in spite of the losses on Friday, as the markets reacted to President Trump and other political leaders being diagnosed with COVID. Diversified bonds were roughly flat, as corporate bonds were up slightly, but Treasuries and muni bonds were down slightly for the week. The jobs report on Friday showed gains for the month of September, but the weekly unemployment claims continue to run at historically high levels, despite showing relatively lower levels for the past several weeks. Many pundits see the US economy continuing to grow and rebound from the height of the pandemic, but the pace of growth is slowing moderately.
Tech stocks were the biggest laggards for September, as the NASDAQ (-5.2%) exceeded the Dow (-2.3%) and S&P 500 (-3.9%) declines for the month of September. Many pundits believe this may be due to some profit-taking, as those same tech stocks have led the way for most of this year, with the NASDAQ up an amazing 24.3% YTD. Nearly all bonds were down for the month of September, with diversified bond portfolios losing up to a half percent for the month. Thus, investors can expect to be disappointed with their portfolio statements, as diversified portfolios were down about 1% - 2% for the month. For what it’s worth, that’s a whole lot better than it was a couple weeks ago, as the markets rallied late in the month to trim losses. I expect we will continue to see volatility over the next several weeks as we get closer to the election.
For those of you who love data even a fraction of how much I do, I found this chart below that could keep data geeks like me mesmerized for an hour. This chart shows the S&P 500 returns for the last 94 years, beginning shortly before the Great Depression. These are grouped by the magnitude of their gains or losses, and demonstrates that the markets have had positive returns 73% of the time, but only six of the 94 years were those gains even close to their historical average of 10.2%. Further, while there were seven years the markets lost more than 12%, there were 49 times that the markets gained more than 12%. You can let the data speak for itself below. Enjoy!