Market Commentary, 12/28/18

Greetings:

A rocky start on Christmas Eve brought the Dow below 22,000, but the stock market responded with a significant jump on Wednesday. The S&P was up 4.96% and the Dow gained 1,086 points, the largest point gain in Dow history, to close the day up 4.98%.

The volatility continued yesterday with the Dow closing up 260 points after being down over 600 points going into the final two hours of trading.  This Thursday turnaround was the largest such swing for the Dow since October 4, 2011, for the S&P 500 since May 25, 2010, and for the Nasdaq since November 18, 2008. (www.marketwatch.com)

Markets have been batted around this week as a result of light holiday trading volume and computer-driven trading. Those factors have triggered several sharp daily moves and a rise in volatility, in what is typically a quiet trading period.

Last week the Senate was unable to come to an agreement on a spending bill, leading to a partial government shutdown. Funding for the border wall is the cause of the stalemate and as of now it appears the shut-down will continue into the New Year. This marks the third government shutdown of the year and affects about a quarter of federal offices. Historically the 20 shutdowns that have occurred since 1976 haven’t been impact events for the stock market. (www.wsj.com)

The Fed announced last week that they will increase interest rates for the fourth time this year, and they also forecast no more than two rate hikes next year. Despite reducing the expected rate hikes in 2019, the overall outlook wasn’t conservative enough fort he market, leading stocks downward last week. (www.investors.com)

We should see some clarity in the New Year, as the fourth-quarter earnings season gets under way in mid-January and the late-January Federal Reserve meeting that should offer further clarity on the central bank’s policy intentions.

Wishing you and your family a Happy New Year!

Regards,
Jeremiah Patterson, CFP^®

Copelin Financial Advisors
514 Brooks Street
Sugar Land, TX 77478
Phone: 281 240-2902
Fax: 281 240-2856
jeremiah@copelinfinancial.com

Securities offered through ProEquities, Inc., a Registered Broker-Dealer and Member FINRA & SIPC Advisory Services offered through Harvest Investment Services, LLC., a Registered Investment Advisor. Copelin Financial Advisors, Inc and Harvest Investment Services, LLC are independent of ProEquities, Inc.