As the first week of October slips by, global stock trading show no signs of whistling past the grave yard.
Daily records in the US have become an inside joke in newsrooms.
“Are we going to run a market story again?”
“What will we say today that differs from yesterday’s story?”
Not even the worst shooting massacre in the US gave the markets pause. North Korean missile launches are shrugged off. The US will get a bad employment number Friday morning, but the market will power through on the premise that the hurricanes created a one off report.
Perhaps the Volatility Index, or Wall Street’s “fear gauge,” fell 4.6% Thursday to 9.19, surpassing its record closing low of 9.31 set in December 1993 is the “October Surprise” this year.
Now, of course, no chart moves straight up from left to right, which brings me to Alan Greenspan’s thought in 1996 of “irrationally exuberant” should be recognized as a distinct possibility.
The Dow Jones industrial index is up nearly 25% since Election Day 2016. The broader S&P 500 is up 22.4% over the same time frame.
The simplest explanation — as I have said before — is that there is nowhere else to put your money for returns. Bonds, currencies and commodities will not provide the rate of return that equities have.
So the October Surprise this year for the stock market could be that there is no pull back. That said I’ll still be whistling past the grave yard for the next few weeks.