Jul 19, 2019
Yesterday, the yield curve (spread between yields on 10-year and 3-month US Treasuries) briefly moved into positive territory for the first time since May 23rd and ended a streak of 40 days at inverted levels. While the curve barely moved out of inverted territory (less than one basis point) and is in and out of inversion this morning, positive is positive! As we have mentioned in the past, while it has been a reliable recessionary indicator (sometimes with a lag), an inverted yield curve does not necessarily mean things will immediately turn south for the stock market.
To continue reading this B.I.G. Tips report, start a two-week free trial to Bespoke Premium.
Jul 15, 2019
The S&P 500 came into the new trading week up 20.22% year-to-date, which is the biggest gain at this point in the year since 1998. This year’s gain is the 9th strongest move at this point in the year in the S&P’s history dating back to 1928. It’s also just the 9th time the index has been up 20%+ at this point in the year. (Keep in mind that the S&P fell 19.8% from its high point to low point in Q4 2018, so while this year’s move has been impressive, the index is not all that far above its 2018 highs.)
Below is a look at all years that the S&P 500 has been up 20%+ at this point in the year (133 trading days). For each year, we show how the index performed over the next month, three months, and through the rest of the year.
To continue reading this report and see how the S&P 500 performed in prior years that saw 20%+ gains through mid-July, start a two-week free trial to Bespoke Premium!
Jul 11, 2019
The first half of 2019 was extraordinarily strong for US equities, and if you measure the returns from the close on Christmas Eve, the gains look even more gaudy. But how gaudy were they really? Keep in mind that prior to the 12/24 low, the S&P 500 had declined 19.8% (on a closing basis) from its high on 9/20, so when you look at the period from the start of Q4 2018 through the end of Q2 2019, the returns are a lot less spectacular.
We define a bear market as any move of 20% or more from a closing high to a closing low, so based on that definition, last year’s Q4 decline was close but not quite a bear market (the 20% threshold was reached on an intraday basis). Surprisingly enough, there have been a number of instances in the last 50 years where the S&P 500 saw similar ‘near-bear’ markets with declines of 19%+ (but not 20%) which we have highlighted in the table and chart below. We include how the S&P 500 performed in the months and years following those “near-bear” lows to see how the current rally stacks up and where it might go from here.
To continue reading this B.I.G. Tips report, start a two-week free trial to Bespoke Premium.
