Looking back, it was another record week on Wall Street, with all the major indexes hitting all-time highs even though the hoped-for cool down in the U.S. China trade war got some cold water thrown on it.
Markets sure were feeling their oats as news circulated that the U.S. and China might roll-back tariffs, as a sign they were optimistic and they were on a mutually agreed to path towards at least some partial agreements.
Then, just as markets were looking good and about to draw in some of the huge piles of sidelined money, President Trump poured cold water on the prospect of the U.S. repealing any tariffs.
But still stocks forged forward marking gains on an otherwise dull Friday session.
For the week, the S&P 500, the institutional index, closed at 3093.08, up .8%. That marked 5 weeks in a row of straight up gains for the money managers’ mainline benchmark.
The Dow Jones Industrials Average closed at 27,681.24, up 1.2% for the week.
And the Nasdaq Composite closed at 8475.31, up a tidy 1.1% for the week.
It’s the institutional index, the S&P 500, that investors are watching closest.
That’s because so many money managers and mutual funds are measured against it. And it’s those professionals wielding hundreds of billions of dollars, by some measures more than a trillion dollars, of cold hard underperforming cash that could quickly and for a good quarter be the fuel to keep markets flying higher.
Everything’s Staying the Same
This bull market, the one that started in 2009, is still the most hated, most mistrusted bull market in history. And the older it gets, and the higher it goes, the more it’s hated, and the more it’s mistrusted.
All that means is there’s a gigantic pile of money yet to be put to work, ready, able, and likely to come off the sidelines chasing performance as the S&P 500 index and all the passive investing indexed vehicles that follow it make shepherds of actively managed funds look stupid.
It’s been a tepid “risk-on” temperament pervading the Street, but risk-on, nonetheless. You can see that in the bond market, how yields have risen, and stocks haven’t blinked. You can see that in how gold’s been backtracking. You can see that in global markets making new highs. You can see that in better prospects for global growth, as the IMF said last week, they expect 3% growth, a monumental step in the opposite direction of where growth looked like it was heading.
Just maybe not today. The futures are down this morning as I write this forecast at 8:00 am Eastern. And maybe not this week. After all the markets need to take a breather now and then.
But, barring any really ugly news or backtracking economic data coming out, markets sure look like they want to go higher. And all that money on the sidelines is the number one reason it has to go higher.
At least, that’s how it looks, how it is. Just don’t forget, this crazy market can change on a dime when crazy stuff happens.
Still, I’m bullish, until I’m not. You should be too.
Mysterious Pattern Could Generate $15,000 in Monthly Income for You
Over the past year, a strange pattern has been appearing in the markets every four or so days. And it has been signaling huge gains.
Keith Fitz-Gerald, a chief investment strategist, has been testing this for months. And what he discovered was astounding.
Just spotting this pattern can lead to a triple-digit winner every five days on average.
Even better, you could pocket $15,000 every month.