Another precipice? Stocks have had some shaky moments the lastfew years. Without fail they have been able to pick themselves up, shake it off and move higher. We believe we are now at another precipice and wondering if this time is different. Below are charts of four major indices. So far the pull back looks similar to the spring correction with the Russell 2000 Small Cap Index the only one to violate the March lows. The further we move along the closer we come to the first 10% correction for the S&P 500 since 2003, just 33 points to 1400. As you can see the damage was quickly contained in the spring, we believe we are going to have to get help from the Fed in the way of lowering interest rates and a flood of liquidity to stop this drop. The only problem is… that is what got us into this credit issue in the first place?
Did You Know…
AWFUL AUGUST – Since 1990, the month of August has produced the worst average total return of any of the 12 months for the S&P 500 stock index. The average August has resulted in a loss of 1.0%. Ten of the 12 months have been up on average and only August and September have suffered a negative average monthly total return in the last 17 years. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market (source: BTN Research).
Final Thought
“Bills travel through the mail at twice the speed of checks” – Stephen Wright
Chart Spotlight
Chart Spotlight
Another precipice? Stocks have had some shaky moments the last few years. Without fail they have been able to pick themselves up, shake it off and move higher. We believe we are now at another precipice and wondering if this time is different. Below are charts of four major indices. So far the pull back looks similar to the spring correction with the Russell 2000 Small Cap Index the only one to violate the March lows. The further we move along the closer we come to the first 10% correction for the S&P 500 since 2003, just 33 points to 1400. As you can see the damage was quickly contained in the spring, we believe we are going to have to get help from the Fed in the way of lowering interest rates and a flood of liquidity to stop this drop. The only problem is… that is what got us into this credit issue in the first place?
Did You Know…
AWFUL AUGUST – Since 1990, the month of August has produced the worst average total return of any of the 12 months for the S&P 500 stock index. The average August has resulted in a loss of 1.0%. Ten of the 12 months have been up on average and only August and September have suffered a negative average monthly total return in the last 17 years. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market (source: BTN Research).
Final Thought
“Bills travel through the mail at twice the speed of checks” – Stephen Wright
Add comment August 7, 2007