The 1% Market Move: 11/26/2018

The Bottom Line
  • S&P 500 up +1.55 %
  • Stoxx Europe 600 up +1.23%
  • Shanghai Composite Index down –0.14%
So What Happened?

There was no post-Thanksgiving turkey hangover in the markets today, as all major U.S. stock indices closed with positive figures. After a rocky start last Monday and Tuesday, the U.S. market did not see another +/- 1% move the rest of the shortened trading week. A slightly negative performance on Black Friday (-0.66%), however, was enough to push the U.S. market into “correction” territory, defined as a drop of more than 10%. As of Friday the S&P had declined nearly -10.20% from its all-time high on September 20. According to BTN Research this marks the 6th correction of the current bull market (began March 2009), which means on average a correction has occurred once every 19.5 months (the historical average since 1920 is once every 12 months, as per Fidelity).

Though today’s action does not seem to have a clear catalyst, it may signal Wall Street has some hope in advance of upcoming events such as the release of the Federal Reserve’s November meeting minutes (to get an idea of what the Fed thinks of the economy) and the much-anticipated meeting between President Trump and Chinese President Xi Jinping at the G20 global economic summit at the end of this week. As we’ve stated ad nauseam, traders worldwide are anxiously awaiting the outcome of this meeting, as the dispute over trade practices has yet to be settled, In fact, just today the White House announced it is considering a 10% tariff on iPhones and laptops imported from China, on top of the previously announced 25% tariff on $200 billion of goods.

To further compound our case for ignoring stock market volatility, we would like to leave our readers with a timeless quote from legendary investing guru, Peter Lynch:

“Far more money has been lost by investors trying to anticipate corrections,
than lost in the corrections themselves.”

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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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