In a market full of twists and turns, we got thrown a HUGE curveball this quarter. And, oddly enough, that curveball was a very stable market! For the quarter the price change for the S&P was 3.31%. And the only real volatility we saw occurred before the Fed meeting in September when market participants decided to price in a rate hike that never materialized.
Thus far for the year, the S&P 500 has appreciated 6.08% on a price basis. And, even though I anticipate some market gyrations around the election, I think getting the results should have a calming effect on the markets. This could lead to a further reduction in volatility, but anything is possible. A Trump win could see Brexit like volatility, while Hillary winning should signal a continuation of our current policies and, therefore, calm the markets.
The big thing I am interested to see is how earnings come along. If they are strong, we could have formal proof that the earnings recession is over. Tie that to election uncertainty going away and that could spell gains for the markets.
Time will tell.
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