Third quarter stock market performance was modestly positive. The S&P 500® Index and the Dow Jones Industrial Average both advanced by 1.2%. But that small gain was erased in the first week of October, as worries over trade, manufacturing, and politics took center stage. Still, the U.S. stock market’s year-to-date advance has been impressive; through September 30, the S&P 500® returned 20.6%, its best nine-month run of any year this decade.
The first quarter’s equity markets rebound continued into June after a weak final period of 2018. The S&P 500® Index rose by nearly 4% in the second quarter, bringing the Index’s year-to-date 2019 return to +17%, its best first half performance in 22 years.
On January 28, 2019, Palisade Capital Management Co-Chairman and Chief Investment Officer Dan Veru appeared on CNBC’s “Worldwide Exchange” to discuss the key items for the markets this week: earnings, the Fed meeting, and U.S.-China trade talks.
The lockdowns and flash recession which followed the beginning of the COVID-19 pandemic precipitated a reset of the global economy and initiated a new business cycle. Recent stock market weakness, however, is a cyclical correction in a secular bull market, and we believe the U.S. remains early in the recovery phase of this new cycle.
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