Markets Continue to Rise… But For How Much Longer?

Markets Continue to Rise… But How Much Longer?
Election Process to Begin Shortly!  Fun Stuff!

Today the markets will not rise or fall.  The markets are closed to celebrate the Life and Achievements of Martin Luther King Jr., a civil rights leader well-known for his contribution to ending racial segregation and for racial equality.  It’s so very important to reflect on where we are today as it is because of what was accomplished yesterday.  I hope all can take a moment to reflect.

With the knowledge of a signed Trade Deal, the thoughts of interest rates staying low, and that the upcoming impeachment hearing is a non-issue, the markets continued to push up to record highs.

For the week, the Dow Jones rallied 1.84%, the S&P 500 1.99%, the Nasdaq Composite 2.29% and the Russell 2000 Small Cap Index up 2.54%.

At this early part of the year, the S&P 500 is already up 3.14% after a 30% rise in 2019.  How high will the markets go?  How long will this rally last?  Great questions…. and the answer is simply, until they stop!  No one can predict unless by chance.

I read an article this weekend asking, who’s doing the stock purchasing?!  The article suggested that hedge funds are doing the current buying, moving the averages higher, because they so much under-performed the indexes last year and want to try to catch up.  If this is true, further evidence that having a low cost US overall stock index as a core holding makes a lot of sense.

Internationally as found the major equity averages higher last week with the Developed Market EAFE rising .66% and the Emerging Market Stock Index up 1.17%.

Bonds here in the US remained mostly flat as the yield on the 10 Year US Treasury remained stable at 1.83%.

Election Process to Heat Up

“Life moves pretty fast.  If you don’t stop and look around once in a while, you could miss it!” Where did we first here that line?  Remember the movie Ferris Bueller’s Day Off!  It’s sure true and hard to believe in 2020 we’ll have another Presidential Election.

Beginning next month (hard to believe February is only days away…!), the Iowa Democratic and Republican caucuses will be held, and also early voting in California.  Then on February 11th, primary’s will be held in New Hampshire.

From there, the pace continues and picks up steam.  So much will be said, lied, made up, and written that will sure to make us shake our heads continuously.  If I’m incorrect, I’ll be happy.

Will the election impact the markets and the economy? It certainly will to a point.  How the economy is influenced by our government does have an impact.  As always our job is to provide continued guidance based on the cards that are dealt and not my own individual opinion.

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