The 1% Market Move: 11/15/2018

The Bottom Line
  • S&P 500 up +1.06%
  • Stoxx Europe 600 down -1.06%
  • Shanghai Composite Index up +1.36%
So What Happened?

The market made its second +/-1% move of the week, this time notching a gain of +1.06%. Today’s advance puts an end to five consecutive trading days in the red, a streak that began just one day after it closed up +2.12%. With today’s close the S&P 500 now sits at +2.12% for the year and has returned +5.59% over the past twelve months.

What started as an otherwise ho-hum day – at least in the U.S. – quickly changed gears into a more upbeat mood upon renewed hopes of de-escalating trade tensions with China. The market is ostensibly playing a game of ping-pong when it comes to news of the trade war; that is, any “good” news seems to result in short-lived Wall Street jubilation, while “bad” news is taken as a sign of imminent catastrophe. Today just happened to be the former, with Chinese stocks likewise rising on the news. As long-term investors, however, we recommend digesting any “new” news with a rather large grain of salt since the U.S. and China are still slated to have formal trade talks at the G-20 international economic summit next month – the outcome of which is still up in the air.

In Europe, stocks fell on news that two members of the U.K. Prime Minister Teresa May’s staff quit right in the thick of “Brexit” negotiations with the European Union. We are almost coming up on the 11th hour of Brexit, as the official date for separation is March 2019. It appears this sudden exodus of key staff members has traders concerned there will be further hiccups in what has already been a chaotic process.

As we cautioned heading into November, these high-profile news stories will likely continue to drive the market for the time being. It is impossible to predict how the market will react day-to-day. That is why we emphasize focusing on your long-term goals as opposed to trying to game the market.

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The S&P 500 is a market capitalization weighted index of 500 leading U.S. companies and one of the most common benchmarks for the broader U.S. equity markets.

The NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on The Nasdaq Stock Market. Launched in 1971, the NASDAQ Composite Index is a broad based Index. Today, the Index includes over 3,000 securities, more than most other stock market indices. The NASDAQ Composite is calculated under a market capitalization weighted methodology index. To be eligible for inclusion in the Composite the security’s U.S. listing must be exclusively on the Nasdaq Stock Market (unless the security was dually listed on another U.S. market prior to January 1, 2004 and has continuously maintained such listing), and have a security type of either: American Depositary Receipts (ADRs); Common Stock; Limited Partnership Interests; Ordinary Shares; Real Estate Investment Trusts (REITs); Shares of Beneficial Interest (SBIs);
Tracking Stocks
Security types not included in the Index are closed-end funds, convertible debentures, exchange traded funds, preferred stocks, rights, warrants, units and other derivative securities.

If at any time a component security no longer meets the above eligibility criteria, the security is removed from the Composite Index.

The Stoxx Europe 600 is a subset of the STOXX Global 1800 Index. With a fixed number of 600 components, the STOXX Europe 600 Index represents large, mid and small capitalization companies across 17 countries of the European region: Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.

The Shanghai Composite Index is a market capitalization weighted index made up of all the A-share and B-shares that trade on the Shanghai Stock Exchange.

Past performance is not an indication or guarantee of future results. Investing in securities involves risks, including the potential loss of all amounts invested.

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