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The Northern Star 10/22/18 Examining October


Message from Jon

Markets Update:

Global stocks faced more headwinds yesterday as China's rally fades. 1 We are seeing Brexit concerns and controversy heating up with the UK and an un-relenting shadow of Tariffs and Trade Wars continuing to plague the markets. 2,3

This past week, concerns regarding earnings season seem to be overwhelming the market sentiment at the moment, causing a continued decline even in the face of an economy that is at the lowest unemployment rate since 1969. 4

Earlier this year, I was hopeful for a 4-6% return this year, and at this point, even that level of profit seems a bit of a stretch. I know that we still have 2months of the market left, and historically, those have been really strong months, so I guess time will tell.

We are and have always been diligent and mindful of the market conditions and corresponding data, prepared to realign portfolios to the proper risk levels according to what we are seeing. 

Till we speak again, enjoy the week and Boiler UP! 



1: https://www.ft.com/content/30b2c674-d667-11e8-ab8e-6be0dcf18713

2: https://www.ft.com/content/64e7f218-4ad4-11e7-919a-1e14ce4af89b

3: https://www.ft.com/content/381f4958-d6af-11e8-a854-33d6f82e62f8

4: https://tradingeconomics.com/united-states/unemployment-rate

Examining October


Stock performance was mixed last week as investors considered the impact of interest rates, international affairs and corporate earnings.[1] The S&P 500 gained 0.02%, and the Dow added 0.41% to post its first weekly gains in October. The NASDAQ declined 0.64% and extended its losing streak.[2] International stocks in the MSCI EAFE dropped by 0.08%.[3]

While the final weekly results showed relatively little growth or loss, the week included some volatility.[4] So far, domestic indexes have struggled this month. As of October 19, the S&P 500 and Dow had each lost more than 3% for the month, and the NASDAQ was down 7%.[5]  

As we have often discussed in our market updates, volatility may feel uncomfortable, but market fluctuations are normal. That perspective becomes especially relevant in October, which is considered the most volatile month for markets.[6]  

Examining October History

Historical performance can't predict future results. However, we do believe that understanding what makes October unique can help provide context for the current environment.

Significant market eventsFor generations, many of the most significant market events have taken place in October, including the crash of 1929 and multiple large drops in 2008. In addition, last Friday, October 19, marked the 31st anniversary of the "Bloody Monday" market crash. On that date in 1987, the S&P 500 lost over 20% of its value.[7]

Higher than normal volatility
Since 1950, the S&P 500 has experienced more 1% moves in October than any other month.[8] The month has also been the Dow's most volatile since its beginning in 1896.[9]

Surprising performance
Despite the large events and high volatility that October can bring, its results may be stronger than expected. For the past 20 years, October has had the strongest performance of any month.[10]

Exactly how this month will end remains to be seen, as we still have a few trading days left. But we hope that understanding how much markets often move in October will help you ride out any future volatility with more confidence. Of course, we're also here to provide any answers or information you need, so contact us any time.

Wednesday: New Home Sales
Thursday: Durable Goods Orders, Jobless Claims
Friday: GDP, Consumer Sentiment


Notes: All index returns (except S&P 500) exclude reinvested dividends, and the 5-year and 10-year returns are annualized. The total returns for the S&P 500 assume reinvestment of dividends on the last day of the month. This may account for differences between the index returns published on Morningstar.com and the index returns published elsewhere. International performance is represented by the MSCI EAFE Index. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.


[1] www.cnbc.com/2018/10/19/wall-street-futures-point-to-a-slight-rebound-after-the-dow-sheds-300-points.html

[2] www.cnbc.com/2018/10/19/wall-street-futures-point-to-a-slight-rebound-after-the-dow-sheds-300-points.html




[3] www.msci.com/end-of-day-data-search

[4] www.cnbc.com/2018/10/19/wall-street-futures-point-to-a-slight-rebound-after-the-dow-sheds-300-points.html

[5] www.cnbc.com/2018/10/19/wall-street-futures-point-to-a-slight-rebound-after-the-dow-sheds-300-points.html

[6] www.marketwatch.com/story/fasten-your-seat-belt-october-is-almost-here-2018-09-25

[7] www.cnbc.com/2018/10/15/this-chart-shows-why-october-has-such-a-scary-reputation-on-wall-street.html


[8] www.cnbc.com/2018/10/15/this-chart-shows-why-october-has-such-a-scary-reputation-on-wall-street.html

[9] www.marketwatch.com/story/should-investors-fear-october-a-historic-jinx-month-for-stocks-2018-09-26

[10] finance.yahoo.com/video/ryan-detrick-markets-210928786.html?format=embed
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