Market Beat: The third quarter was the best in five years
The third quarter that closed out on Friday, Sept. 28, was the best quarter for the stock market in five years.
Depending on how you measure it, this has been the longest bull market in history and we’ve seen new record highs recently.
The Dow Jones Industrial Average was up 9.26 percent in the third quarter and is up 7.04 percent year to date. It hit an all-time high of 26,769.16 on Sept. 21. The S&P 500 gained 7.28 percent in the third quarter and has risen 16.09 percent year to date. It also registered a new record high on Sept. 21 when it hit 2,940.91.
The technology heavy NASDAQ gained 7.23 percent in the third quarter and is up 16.56 percent year to date. It hit its record high on Aug. 30 with a reading of 8,133.30. It has been a good year for U.S. stocks.
International equities have not performed as well. The MSCI EAFE index is down -3.76 percent year to date and gained a modest 1.79 percent in the third quarter. EAFE stands for Europe, Asia and the Far East. Foreign markets have been upset over concerns of a trade war developing and other factors.
The MSCI Emerging Markets Index has dropped -9.54 percent year to date and gained a modest 0.11 percent in the last quarter. Emerging markets have been plagued by currency woes in Turkey and a slowing economy in Argentina.
The U.S. Dollar has been strong relative to other currencies lately and the dollar strength has also affected foreign markets. The Dow Jones FXCM Dollar index is up 2.58 percent year to date and gained 0.68 percent in the third quarter.
The price of crude oil has been rising which has helped stocks in the Energy Sector, but not consumers at the gas pump. The price of crude oil has risen 29.08 percent year to date and jumped 10.36 percent in the third quarter alone. Gasoline has been going up, the national average for one gallon of unleaded gas is $2.87, but the price is much higher in California at $3.73.
Precious metals have been dropping, gold is down -10.24 percent year to date and fell -4.86% in the third quarter.
Interest rates have been rising. The yield on the benchmark 10-year U.S. Treasury bond has risen 0.66 percent year to date and is up 0.21 percent over the last quarter. Earnings season reporting will get going in the next couple of weeks and the outlook is good.
Kenneth Roberts is a Truckee-based Registered Investment Advisor. Information is at his blog at http://www.sellacalloption.com or 775-657-8065. The mention of securities should not be considered an offer to sell or solicitation to buy investments mentioned. Consult your investment professional to understand the risks and/or how the purchase or sale of these investments may be implemented to meet your investment goals. Past performance is no guarantee of future results.