With just 1 trading day remaining in the 1st half of 2014, the S&P 500 is up +7.2% YTD (total return). The index closed last week (Friday 6/27/14) at 1961, less than 2 points below its all-time closing high of 1963 set just 10 days ago (6/20/14). The excuses that could have derailed the US stock market during the first 6 months of 2014 are numerous, e.g., change in the leadership at the Federal Reserve; unthinkable violence in Syria, Afghanistan and Iraq; a winter that would not end throughout the East Coast; and a stalemated political system in Washington. None of these reasons (so far) has slowed down a bull market that is in its 64th month as of today (source: BTN Research).
The US government has tracked the change in the size of our economy every quarter for the last 67 years (i.e., 268 quarters). The country’s quarterly economic growth has been “as bad as or worse than” a drop of 2.9% only 18 times in the 268 quarters (7% of the time), including the data from 6/25/14 that reported a 2.9% decline during the 1st Q 2014. Assuming that the US is not currently in a recession, then the latest report is only the 2nd incidence in 67 years when the quarterly change was “as bad as or worse than” a loss of 2.9% and the economy was not in an official recession (source: Commerce Department).
The upcoming week will likely have one of the lightest trading volumes of the year (the 4th of July falls on Friday) as US investors head out of town early for an extended holiday weekend. The nation’s jobs report for the end of June will be released mid-week, hoping to build on last month’s +217,000 job gains and 6.3% unemployment rate (source: DOL).
Notable Numbers for the Week:
- AVOIDING A CORRECTION – As of today, the S&P 500 has gone exactly 1,000 calendar days (i.e., from 10/03/11 through and including 6/29/14) without a 10% or greater drop in the index, the 5th longest stretch without a double-digit pullback in the last 50 years. If the S&P 500 is able to avoid a 10% correction through 11/04/14, this run will move into 4th place, replacing a 1,127 day streak within the 1984-87 bull. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).
- SCARY THOUGHT – 45% of US households headed by individuals of “working age” have not set aside any funds for their future retirement (source: National Institute on Retirement Security).
- RAINY DAY FUNDS – Less than half of Americans surveyed (49%) have set aside funds that would cover expenses for 3 months that would be needed in the event of a financial emergency (source: FINRA).
- THIS IS A NO BRAINER – The elimination of Saturday delivery of mail would save the US Postal System an estimated $2 billion a year (source: Postmaster General Patrick Donahoe).
By T. Kevin Taylor, JD, LLM
Securities offered through NFP Securities, Inc., Member FINRA/SIPC. NFP Securities, Inc. is not affiliated with The Vaughn Group, Inc.
This material represents an assessment of the market and economic environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed by NFP Securities, Inc. as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. The indices mentioned are unmanaged and cannot be directly invested into. Past performance does not guarantee future results. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market. Copyright © 2014 Michael A. Higley. All rights reserved.