As the calendar turns to November ‘Tis the Season’ to get ready for the holiday season. November also starts the best 6 month period for the stock market.
‘Tis the SeaSon’ is also a Jimmy Buffett album for you summertime folks!
With the US stock markets (S&P, Nasdaq, Dow) all near all-time highs, the question begs where do we go from here?
I agree with the following analysis, courtesy of Drill Capital Management:
In the face of political and geopolitical headwinds, US stocks continue their climb into record territory, supported by powerful financial and economic forces, including:
- Historically low indicators of financial market stress, as reported by the Chicago Fed’s National Financial Conditions Index (see below)
- Low real interest rates
- Low core inflation and well-anchored inflationary expectations, helping to restrain any rapid rise in bond yields
- Healthy balance sheets in the corporate/household/banking sectors, acting as buffers against financial accidents
- A global synchronous economic expansion for the first time in ten years, with unemployment in the developed world near 40-year lows
- Real global growth of 3.6% in 2017 and 3.7% in 2018, as forecast by the IMF, the best growth rates since the Great Recession
- Plentiful liquidity and readily available credit
- In the US, no recession in sight, despite an economic expansion that is nine years old
- Rising corporate earnings in the US and in most overseas markets
The Chicago Fed’s National Financial Conditions Index (NFCI) provides a comprehensive weekly update on U.S. financial conditions:
Readings above 0 generally indicate tighter/stressed financial conditions, while readings below 0 generally indicate looser/calmer financial conditions.
My primary concern right now is the increasing bullish sentiment about the stock market, from both individual and institutional investors. I try to remember Warren Buffett’s saying “be fearful when people are greedy and be greedy when people are fearful”. I use the CNN Money Fear & Greed Index, which looks at 7 different financial market indicators, to glean where investor sentiment is as the moment. We recently moved into the Greed category, up significantly from 1 year ago.
As such my approach right now is remain positive but cautious.
Special thanks: the best compliment I can receive is a referral from a client or colleague.
I want to extend a special thanks to clients & colleagues who have recently referred me to family and friends:
Swikar P. Carmen D.
Anna P. Kevin W.
November Calendar of Events (comments and additions for future months are always welcome)
- November is National Family Caregivers Month. Please consider reaching out to a family member or friend who is caring for a loved one. Why not offer to give them a day off.
November 1st Healthcare open enrollment – runs through 12/15/17 – for coverage starting Jan 1, 2018
Note: Medicare open enrollment started 10/15/17 and end 12/7/17
November 7th Election Day
November 11th Veterans Day – says thanks a Vet
November 16th Great American Smokeout – encourage a smoker to quit
November 23rd Thanksgiving – have a wonderful holiday
I hope you find this report useful. Please share it with anyone who you feel would benefit from the information.
Sources: Drill Capital Management, Raymond James & Associates, CNN-Money.
Although information herein has been obtained from sources deemed reliable, its accuracy and completeness are not asserted. All opinions and estimates included in this report constitute the judgment of the financial advisor as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.
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