Monday, 17 September 2018 18:45

September 2018 Start Featured

A mini correction for seven months in the S&P500 and finally the index in August made a small break through the January 26th high. Global markets didn’t endorse the action with only the U.S. in the black for major averages.

S&P 500 August +3.02% YTD +8.52% DOW August +2.16% YTD +5.04%

NASDAQ August +5.71% YTD +17.47%

The gain in the S&P500 was a modest +1.5% over the late January high.

September Start

September’s first four days of trading sputtered and reversed the new found level. The Technology group, 26% of the S&P500 index, quickly gave up 3.3% of their pronounced 2018 gain with fears of Washington regulation.

A number of marquee names followed and the market promptly turned defensive. For the start of September high flyer Micron Technology sold off 10% on Thursday, symptomatic of how quickly sentiment shifts. Emerging Markets continued a 20% downslide.

Forward Risks

Trade uncertainties following tariff dialogue, particularly with China, were principal factors in the market give backMexico and Canada talks were progressing somewhat positively…offsetting the negative; corporate earnings have been excellent so far in 2018 with strong margins.

There is investment fear that corporate earnings are hitting their high point and will likely pull back. Rising rates, Trump issues plus the upcoming mid-term election are fueling uncertainty and leaving the investor unsettled. The net effect is that a number of issues could provide investor adjustment and the September start in trading may bring a glimpse of the rest of the month and balance of the year.


Consumer confidence is soaring and inflation and recession aren’t close at hand. Fundamentals are strong but wild cards are developing and it’s the surprise event that may change valuations.

Our strategy is to manage client accounts cautiously on both the equity and fixed income sides. We are increasing our short-term bond holdings to temper risk and provide income. Yields are simply getting closer to being competitive in a complex investing environment.

We expect modestly positive results through year-end based on superior economic results carrying the day. We anticipate continued bumpy trading action due to headline risk adjustments.


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