In keeping with the theme of 2020, the 3rd quarter was a wild ride. The S&P 500 rallied about 14% in price during the first two months of the quarter and then pulled back about 10% during the month of September. To end the quarter, it settled up a little more than 4% for the year to date.
But what is the most fascinating aspect of those data points is the continuing disparity between the returns of the indices. I can’t re- member a time when the returns of various benchmarks were so wildly different, as we discussed in the last newsletter. For example, the Dow Jones Industrial Average ended the 3rd quarter with a year to date price change of –2.08%, the S&P Global index was –1.01%, the small cap index was –17.6%, while a handful of tech stocks have propelled the NASDAQ well into positive territory.
What will happen next in 2020? Frankly, not much would surprise us. But the election is close at hand and we’ve got a Supreme Court nomination in the confirmation process. Buckle up! It should be a wild ride.