Investment Review – January 2019

January 18, 2019 Investment Review

  1. The month of December saw declines across U.S. stocks with the S&P 500 -9.0%, -8.5% for the Dow Jones Industrial Average, and -9.4% on the Nasdaq. Equities saw the largest annual decline during the bull market of the past decade, posting a -4.4% total return on the S&P 500 in 2018, while closing the year at 2506. Fears of a continued trade war, a further rise in interest rates, and a slowing global and U.S. economy provided the backdrop for this challenging month.

  2. The Price to Earnings multiple on the S&P 500 contracted from 20.5X to 16.5X during the 3rd quarter, the 14th largest decline over the past 92 years. This has happened 20 times during the same time frame; 15 of those periods saw a recuperation during the following year. Three of the years which failed to recover, were during the 1930’s following the Great Depression.

  3. Early indications show a positive holiday sales season. MasterCard Spending Pulse, which tracks consumer spending tendencies, saw the best growth in purchases over the past six years, growing at 5.1%, and over $850 billion dollars.

Key Investment Statistics January 2019

Sources: Bloomberg LLC, FactSet, U.S. Department of Labor

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