Weekly Recap   Another week marked by large moves seems almost normal now. Almost. This week the moves were generally up, and as it turned out, it was the best weekly gain for the S&P 500 since October 1974.   And because the market is a fickle beast, the rally unfolded against a backdrop of more lousy economic news. The main report was Thursday’s initial jobless claims number. Another 6.6 million applied for unemployment….
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There have been 10 bear markets in the S&P 500 since 1950 (defined here as a -20% drawdown in the index price from a market high). The below chart shows the historical drawdowns in the index:     Pretty scary huh? Let’s add to the chart and show the subsequent bull markets:     Really puts those drawdowns in perspective doesn’t it? If you include dividends in the December 1987-March 2000 period, the gain is…
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  Flying Blind   The fact that the economic data is starting to turn down surprises no one. As Bank Credit Analyst notes:   “One thing is certain. Economic activity around the world faces its biggest contraction in modern times. Declines in second quarter GDP will be mind-numbingly bad in a wide range of countries, especially those that have instituted lockdowns and the closure of non-essential businesses. According to the OECD, the median economy faces…
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  From Bear to Bull in a Week   Another wild week. The sharpest, fastest bear market in history – the S&P 500 was down -35.2% from its closing high on February 19 to the intraday low on Monday – was followed by the sharpest, fastest move back into bull market territory in history, as the index rallied +20% from that point through yesterday’s close. Both Tuesday and the past three days were the best…
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  Where to Begin?   Most importantly, all of us at Gemmer hope you and your family are healthy and doing as well as can be expected. Everyone here is working hard during this ‘shelter in place’ period and our backup plan to work remotely is functioning better than we could have expected. We were fully operational day 1!   Secondly, you may see trade confirms coming through in the coming days. We are not…
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  V, U, or L scenario?   What a crazy week. What can you say about a week that saw the following daily S&P 500 returns: Monday +4.6%, Tuesday -2.8%, Wednesday +4.2%, Thursday -3.4%, and Friday -1.7%? And after all this the S&P finished up +0.6% for the week. Who’d of thought?   Normally we’d get into today’s strong payrolls report and how the economy had built up a decent head of steam in the…
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Markets Grapple with the Coronavirus   There’s an old saying that markets take the escalator up and the elevator down. That sure was the case this week. Selling pressure was intense all week as investors grappled with the implications of the coronavirus spreading beyond China’s boarders. The S&P officially hit correction territory with a decline of more than 10% from the high. As you can see below, this is the eighth correction of more than…
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    Gauging the Economic Fallout   Up until Thursday the markets remained pretty buoyant in expectation that the Coronavirus infection rate had peaked. This seemed to change on Thursday and Friday as attention turned away from infections towards the economic fallout.   The change of tone could be detected after Japan reported a miserable fourth quarter GDP number. Growth in the fourth quarter fell at an annual rate of -6.3% (chart below) after Japanese…
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