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Weekly Economic and Stock Market Commentary – September 28, 2020




Weekly Economic and Stock Market Commentary – September 28, 2020

As for the stock market specifically: 

September has been September, with the weather changing, the leaves changing colors, and the stock market going from well overbought to somewhat oversold. Nevertheless, the Nasdaq Composite turned in a winning week for the first time in 4 weeks, while the other market numbers I follow continued their weekly losses.

The good news is that we are about to conclude the dreadful month of September. By and large, the September losses (as of last Friday) are about equal to the August gains.

I’ve spoken to several clients over the past few weeks, most conversations have a common thread. They are worried about the coming election and that it may bring significant investment market volatility. If you are worried about the market falling, please contact me so we can put a plan in place. There is a very old adage on Wall Street: “sell down to your sleeping level”. So if you have concerns, just let me know and hopefully we can find your sleeping level.

The bullish percent indicators are all showing columns of O’s and as such I recommend WEALTH PRESERVATION in all areas for client investments. I know I say this often, these are intermediate term indicators. Liken them to driving your car at night and using your headlights to guide you… you can only see as far as your headlights permit. Around the next curve, may be more curves, or perhaps a straight road. Only time will tell. 

Remember, Xs mean OFFENSE or wealth accumulation, while Os mean DEFENSE, or wealth preservation.

Below is where our indicators stand as of September 25, 2020 (Courtesy Dorsey, Wright, and Associates).

On a general note: 

The Federal Reserve reported that household net worth at the end of the second quarter hit a record $119 trillion dollars. The gain during the second quarter – when the lockdowns went into effect – was 6.8%. The personal savings rate during the 2nd quarter was 26% compared to July.

The National Association of Realtors announced that August existing home sales rose 2.4%. The seasonally adjusted annualized rate was 6,000,000 units. The median sales price was $310,400, which is a gain of 11.4% from August 2019.

If you have questions about this Weekly Economic and Stock Market Commentary, or want to find out your sleeping level, email me at philip.rongo@ibexwealth.com.