The U.S. presidential election remains undecided. But the global stock market does not seem to care. In fact, stocks seem overjoyed – the S&P 500 (SPY) and NASDAQ 100 (QQQ) delivered a huge 2-day rally that ranks as one of the best in post election history.
The S&P 500 saw a small 10% pullback in September, historically the worst month of the year for stocks. However the leading index was quick to rebound and is now trading just below the all-time high. Looking forward stocks are moving into the strongest six months of the year and I expect more gains this year.
September is historically the worst month of the year for US stocks. It is the only month of the year with a negative return from 1925 to 2019. Looking forward I remain optimistic on the stock market. I am expecting more volatility in the next few weeks but I think the worst of the sell off is over.
We’ve got a flurry of stock IPOs set to start trading this week. An IPO is when a stock first starts trading on a stock exchange such as the New York Stock Exchange or the NASDAQ. Stock IPOs can be a great opportunity to invest in a company early in the game. If that company does well its share price will climb, rewarding early investors with out sized gains.
After an incredible rally for the last five months US and global stocks took a tumble last week as volatility returned to the market. Despite the recent pullback I remain optimistic on stocks. I do not think this is the beginning of larger decline. I think this is a normal and healthy pullback after a huge rally. These pullbacks are usually good for stocks.