Historians say December has statistically been the best month for stocks but there’s an increasing view on Wall Street that the December gravy train has already come and gone this year. The market rallied in September and October, when stocks typically dud.
So it's a wrap. Bears expect the market to be uninspiring and range-bound to the end of the year. Apparently today’s run-up – Dow up 0.7%, Nasdaq 1.5%, S&P 0.9% - is typical of high-octane starts to December. In other words don’t let it go to your head bull.
The bears may be right. Who knows? History may or may not repeat itself. But it does look like technology stocks are done. As October dawned I picked out the technology sector and the natural resources sector to shine this quarter. The rationale was that techs would get a holiday season bounce while the oil sector would benefit from colder weather as usual, all else being equal.
However, a quick analysis of my humble folio indicates techs appear to have lost steam over the past few weeks while natural resources has powered ahead. Over the past four weeks, EBAY, MSFT, and ADBE have posted average return-to-dates (RTD) of 7%, 6% and 5% respectively. Meanwhile SLV, IGE and EEM, which is weighted 17% in energy, have posted RTDs of 15%, 8% and 7% respectively.
Techs seem to have had their bull run. With all the talk of a slowing economy next year uncertainty – and fear of job losses - has crept into the minds of many consumers. It’s a bit too early to tell what December holds for techs but they have slowed their roll since October, when the Nasdaq posted a whopping 4.8%, it’s biggest monthly gain for the year so far.
No comments:
Post a Comment