4/12/2019 Weekly Update: The Slumbering Beast

Weekly Recap                                                                        

S&P 500                +0.49%

10 Year Treasury   -0.42%

Gold                      0.00%

Volatility              -5.7%

Weekly Update: The Slumbering Beast

Just a brief note this week as the market continues to grind higher.  I guess the biggest news this week is that following 8 straight days of gains, the S&P 500 was down on Tuesday, before resuming its rally the remainder of the week.  If the irony was lost in my delivery I apologize.  While everyone likes a winning market, it does create a bit of skepticism when markets charge uni-directional for months at a time.  The rip rally off of the lows in December is truly a sight to behold, reminding me of similar rebounds of the late 90’s. 

Similar to the current market, in 1998, following the mini-financial crisis caused by Long Term Capital Management’s collapse, the S&P rallied nearly 30% in just over a month and a half.  The large cap index would manage an additional 26% gain in the following 18 months before eventually rolling over into a deep bear market.  As the saying goes, “History rhymes it doesn’t repeat.”  The future of this market may or may not follow the direction of the 90’s tech bubble.  However, time doesn’t seem to be on the market’s side.  The Fed’s resumption of tightening monetary policy would seem likely should this rally continue, and should they not resume tightening the consequences may prove even graver.  For now, it looks like the market will continue to try and lull us to sleep before perhaps revealing its true nature.

Have a good weekend.

Thanks for reading,

Zach and Dave

Calibrate Wealth
515-371-5316  

https://www.calibratewm.com/blog-01

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