Since September 14th the S&P 500 has pulled back over 7.2%. During this time leading names such as Apple, DuPont and CSX have fallen 22.8%, 19.6% and 17.9% respectively; hardly what you’d call a slight haircut. As an analogy, let’s call what’s happened in the past 8 weeks the backlash of a poorly made 3-D movie titled, The Turkeys Are Coming Home To Roost. 3-D stands for Debt, Deficit and Demography, three macroeconomic foxes that are raiding the henhouse. I will revisit this poultry mess later but for now here are the facts.
The dollar value of the market loss of the S&P 500 index is nearing the trillion dollar mark at $945 billion. With the election over, and expected year-end tax increases and federal expenditure reductions on the way – markets are skittish.
“Hey, didn’t anyone tell you this is Thanksgiving week, a time for fun, festivities, gratitude and indulgence?” Hold on now, there just may possibly be a reasonable solution to figure out this turkey scratch? On Friday, party leaders from the house and senate met with the President specifically addressing the fiscal cliff, the tone appeared productive and constructive. Over the weekend, President Obama conversed with Warren Buffett, Tim Cook and Jamie Dimon to get their views on rekindling this sputtering economy. It’s a start!
My market view for the upcoming months (which is subject to change) is less apocalyptic than the media’s talking heads. Let me wrap this minute up with a pint of good cheer; the holiday season has been known to spread out the dough, in more ways than one, to good little hens and roosters. Happy Thanksgiving to you and your family.