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“The worst market I have ever seen in my lifetime or would hope to see again.” – John J. Phelan Jr.
Futures have been moving higher throughout the overnight session but have taken a slight hit following some weaker than expected residential housing data. In terms of both Building Permits and Housing Starts, the headline numbers came in significantly weaker than expected while August readings were revised modestly lower. Looking at the data, multi-family units look to have been the main driver of the weakness. Despite the weaker data, the 10-year yield is still above 1.6%. Commodities are higher as the dollar falls to its lowest levels of the month. All eyes will be on the crypto space this morning as the first US-based bitcoin ETF debuts today.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, including the latest US and international COVID trends.
Thirty-four years ago today, the S&P 500 experienced what was at the time (and remains now) the largest ever single-day percentage decline losing just over a fifth of its value. The crash of 1987 has a lot of lessons for investors, but one important one is that time is on your side when it comes to investing. If you were a dip buyer and stepped in right at the close on 10/19/87 and held through now, your annualized return, not including dividends, would have been an impressive 9.2%. But what if you had the worst possible timing and decided to get long the market on the Friday before Black Monday? Surely, you would have felt pretty stupid on Monday afternoon. However, if you were able to lick your wounds and put the pain of those losses behind you, and hold through the present, the annualized return of your investment would have still been 8.5% (not including dividends). Sure it’s not as good as you would have done if you waited a couple of days and put that money to work after the crash, but it’s still nothing to turn your nose at. When making investment decisions, sitting on your hands sometimes is one of the better decisions you can make.
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