Jeff’s Weekly Market Commentary: Waiting Out The Storm
I’m Jeff and this is my Weekly Market Commentary for May 18, 2016.
I am 51 years old and for most of my life I haven’t really had any hobbies. Over the last year, though, I have discovered that I really enjoy sailing. The power of the wind is incredible and the thought that sails can be used to harness that wind and transfer the energy into forward propulsion seems almost magical.
One big difference riding in a sailboat versus a motorboat is that sailboats lean over as the sails catch the wind. This is known as ‘keeling’. Initially, it feels quite dangerous as the boat starts to roll to the side 45 degrees!
It is very unnerving for a lot of people—like my wife! She prefers keeping her feet firmly planted on terra firma. Keeling reduces the drag and helps the boat start to skate across the water. Of course the wind doesn’t always stay constant so the degree of keeling keeps changing.
Over the last several months I have said that I believe we have seen the market ‘highs’ (2133 on the S&P 500) and that we may see the recent lows (1810 on the S&P500) broken.
As we entered into 2016, the S&P500 had the worst first 6 weeks in the history of the S&P 500….EVER. It plunged 12%. Since then it has surged back up to 2064. If you listen to the Wall Street System pundits, you’d think that everything is fantastic!
Hmmm. I don’t agree. Let’s put this recent surge in the S&P 500 in context.
The S&P 500 hit an all-time high in May of 2015 at 2130. It has been downhill since then with a free-fall in the index during the middle of August where it slid to 1867. Many investors were shocked at the 12% plunge but were relieved that the markets recovered over the next two months—or did they? On January 20th, 2016 the S&P 500 was back down to 1860 and it is becoming obvious to even the most bullish investors that we may not recover for quite a while.
Jeff’s Weekly Stock Market Commentary: Could Saudi Actions Crash The US Dollar?
I have the best clients. Most of them are retired after successful careers. They understand investing and are able to differentiate between real market data versus salesman hype. They are intelligent. They are tuned into what is going on around the world and do a good job of understanding the vagaries of the markets. The more we interact the better we both become. I highly value their thoughts and concerns about the markets and investing.
I received an email from one such client yesterday. He is an international traveler that spends several months each year in emerging markets. He is a great source for what he sees ‘on the ground’. His question was about the potential impact if Saudi Arabia decoupled from the U.S. Dollar. Here is his question: