Friends
Before we talk about today’s stock market mess, let’s take a quick look back on the just finished third quarter. For a market that looked like on the surface that it didn’t do much, there were sure a lot of crosscurrents afoot. The S&P and Dow were slightly up for the quarter but in a very narrow manner. You had the likes of Facebook up about 17% and the silly GoPro up more than 100%, while big names (and familiar ones to Houstonian’s) like XOM (down almost 6%), Chevron (down about 7%), Conoco Phillips (down about 10%), and Schlumberger (down about 13%), all were under pressure. It wasn’t just energy on the downside as the likes of Ford (down about 14%) and Caterpillar (down more than 7%) also suffered losses during the quarter. Besides the mundane moves in the S&P and Dow, small cap stocks as measured by the Russell 2000 were down sizably as was the global EAFE index and high yield bonds. All this combined led to the Morningstar Moderate Risk mutual fund category losing a couple percent for the quarter.
As for today, well it was pretty ugly right from the start. Whether it’s a reaction to Ebola reaching our shores, or just a general feeling that global concerns are mounting, today’s action really favored the bears. The ADP employment report was decent, but the ISM Manufacturing number was a disappointment (PMI Manufacturing Index was not bad though), but the problems are not really U.S. growth or lack thereof, but global slowdowns in Europe, Japan (seems like forever) and China.
As mentioned, stocks were down right from the start of trading and got worse as the trading session wore on. By the close, the Dow Jones Industrial Average was down 238 points to finish the day at 16,804. The S&P 500 was down 26 points to close at 1946. Gold was up $4.20 to trade at $1215 per ounce, while oil was down $ .22 to trade at $90.94 per barrel WTI.
We’ve get the all-important government jobs report on Friday, but for now, the bears seem to be firmly in control of the situation. God knows they have a lot of things working for them, but some might say that we have been climbing a wall of worry for some time now. We’ll see if the bulls feel like making a stand this week, or will the bears be able to keep the pressure on? We’ll be watching.
Have a nice evening everyone.
