Friends
As we close in on the Christmas holiday, the bulls seem determined to salvage something during this joyous season. Stocks climbed slowly but surely as the trading session unfolded and by the close the market averages were sporting some nice gains. On the economic front, we got the final revision to third quarter GDP this morning and it showed the economy growing at a modest 2% as opposed to the previously reported 2.10% (ok, nothing to see here, let’s move on.)
By the close, the Dow Jones Industrial Average was up 165 points to finish the day at 17,417. The S&P 500 was up 17 points to close at 2038. Gold was down $8 to trade at $1072 per ounce, while oil was up $.35 to trade at $36.16 per barrel WTI.
Now, to add to yesterday’s premise that below the surface of the market averages, which are being buoyed by just a small number of stocks, there is really a bear market that has been taking place. The average S&P 500 stock is more than 19% below its 52 week high. That’s right, the average stock is in bear market territory already (remember down 10% is a correction, and down 20% is a bear market). Of course sectors like energy and materials are sporting even greater losses over the past year. Once again, this has been a very difficult year for managers, as many famous hedge fund managers are experiencing their worst years in a long time (some their worst ever), with their P&L’s sporting double digit losses. The bulls might be able to save the market indexes by year end (or not), but the real story lies somewhere beneath the surface.
Have a nice evening everyone.
