Marketview – Are Things Different

Dec 7, 2015 | Blogs

Terry Sawchuk Founder & Chairman

 The Markets

It was 74 years ago today that the attack on Pearl Harbor pushed the United States into WWII.  Being the history buff that I am, I can only imagine the magnitude of that day and the events that followed.  That singular event was the inspiration, a calling, for many Americans to make the choice to serve our country.   Have things really changed that much?  We saw a very similar effect on our population after terrorists attacked us on our home soil on September 11, 2001.  People of all ages and demographics were drawn to the service of our country.  History has a tendency to repeat itself, at least in concept.

Perhaps the behavior of the stock market is another parallel, has it really changed that much?   Below is a chart of the S&P 500 from June of 2015 to December 2015.

Trading Ranges

From June through August the S&P 500 had been confined to a fairly narrow trading band.  September rolls in global fears, concerns over Chinese economic growth, the mounting trouble in Syria and other parts of the middle east, the increasing likelihood of higher interest rates here in the U.S., just to name a few.  The results, a quick and substantial drop in the markets.   Is this a mirror of 2008?  It could be, yet, in less than 30 days the markets shrug off all the scary headlines of September.  The new headlines in October were how the central banks of China and Europe were going to “fix” the issues and the markets responded favorably.  The calendar turns to November and the markets begin to trade just like they did from June to August.  The markets then slide back to a confined trading range.  Once again, the Central Bankers intervene to save the day.  The more things change, the more they stay the same…until they don’t.  At some point, and nobody knows when, the markets will eventually have to stand on their own, until then, the party rages on.

2016 is sure to bring change.  In addition to the election year nonsense the markets will have to endure, there is the reality of rising interest rates.  Some further clarity on the oil markets will probably emerge.  Is there something more substantial going on there; like the possibility that overall demand has fallen to the point where it portends a global economic slow down?  These are all things we are already thinking about.  Rest assured we are monitoring the data closely and are prepared to do whatever is necessary to help our clients protect their money and stay on track to meet their goals.

In the end, we expect more of the same.  Have things really changed that much?

From all of us at Sawchuk and Langenstein we wish you a Merry Christmas and a Happy New Year.

Best regards,
Bill Langenstein

Visit www.sawchukwealth.com to review past issues of The Marketview.

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* All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.  Please consult your Financial Advisor for further information.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.

* The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks.

* The Nasdaq Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

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