“We’re going streaking.”
-Frank “The Tank” Ricard from Old School
Equity markets continue to move higher, and as a result, several long streaks are taking place. Per Ryan Detrick, Senior Market Strategist, “This is the Frank ‘The Tank’ market, as multiple streaks have taken place recently that are in the history books, with some being the most impressive ever.”
Here are some of the notable recent streaks:
- Yesterday ended a streak of 17 consecutive closes for the S&P 500 Index within 0.5% of its previous closing price – the longest streak of small daily changes since 1969.
- The S&P 500 Index has closed higher 8 days in a row for the first time since 2013 and has closed at all-time highs 6 days in a row for the first time since June 1997.
- The S&P 500 has been up 8 consecutive quarters for the fifth time ever.
- The Russell 2000 Index recently closed at a new all-time high eight days in a row.
- The Euro STOXX 600 recently closed higher nine days in a row—the longest streak in more than two years.
- The CBOE Volatility Index (VIX) yesterday closed at 9.19, its lowest close in history. It also closed beneath 10 for 7 consecutive days for the second time ever. Last, it averaged only 10.94 in the third quarter which is its lowest quarterly average ever.
- The Russell Microcap Index recently closed at a new all-time high 12 out of 14 days.
- The S&P 500 has closed higher a record 11 consecutive months on a total return basis (i.e., including dividends). Since 1950*, that has only happened two other times, with both instances taking place during the bull market of the 1950s. Be aware though, neither of those made it to 12 months.
Now That’s a Win Streak
Frank “The Tank’s” run through the quad and into the gymnasium eventually ended—and these long market streaks will eventually end as well. It is important to remember that daily streaks of new highs can’t go on forever, and that increases in volatility aren’t necessarily something to be overly concerned about; pullbacks are a regular part of investing. In fact, the latter stages of the economic cycle have historically seen relatively more volatility, and we expect it to pick up in the fourth quarter and as we head into 2018.
**Please note: The modern design of the S&P 500 stock index was first launched in 1957. Performance back to 1950 incorporates the performance of predecessor index, the S&P 90.
The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security.
Past performance is no guarantee of future results.
The economic forecasts set forth in the presentation may not develop as predicted.
Investing in stock includes numerous specific risks including: the fluctuation of dividend, loss of principal and potential illiquidity of the investment in a falling market.
The S&P 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
The Russell 2000 index is an unmanaged index generally representative of the 2,000 smallest companies in the Russell Index, which represents approximately 10% of the total market capitalization of the Russell 3000 Index.
The Russell Microcap Index is a capitalization weighted index of the 2,000 small cap and micro cap stocks that captures the smallest 1,000 companies in the Russell 2000 plus 1,000 smaller U.S. based listed stocks.
The STOXX Europe 600 Index is derived from the STOXX Europe Total Market Index (TMI) and is a subset of the STOXX Global 1800 Index. With a fixed number of 600 components, the STOXX Europe 600 Index represents large, mid and small capitalization companies across 18 countries of the European region: Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal Spain, Sweden, Switzerland, and the United Kingdom.
The VIX is a measure of the volatility implied in the prices of options contracts for the S&P 500. It is a market-based estimate of future volatility. When sentiment reaches one extreme or the other, the market typically reverses course. While this is not necessarily predictive, it does measure the current degree of fear present in the stock market.
All Indexes are unmanaged and cannot be invested into directly.
This research material has been prepared by LPL Financial LLC.
To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial LLC is not an affiliate of and makes no representation with respect to such entity.
Not FDIC/NCUA Insured | Not Bank/Credit Union Guaranteed | May Lose Value | Not Guaranteed by any Government Agency | Not a Bank/Credit Union Deposit
Securities and Advisory services offered through LPL Financial LLC, a Registered Investment Advisor