The Silent Bear Market

While the S&P 500 continues to be near all-time record highs, there’s a group of stocks, many related to trade, that are languishing well below their highs.

The Wall Street Journal notes that stocks like Harley-Davidson, Whirlpool, Stanley Black & Decker and Caterpillar haven’t done much of anything. The list also includes consumer staples like General Mills and our own, J.M. Smucker. Apple and Amazon make up 30% of the S&P 500’s gain so far this year.

Investors have ranked a trade war as the top tail risk to the markets for four consecutive months, Bank of America Merrill Lynch said in its September survey of global fund managers. Fears that tighter trade policies could crimp growth also have hit fund managers’ global outlooks, with 24% of investors expecting global growth to slow in the next year, up from 7% in August.

“There’s a number of money managers who’ve been hesitant to be involved with the [companies] that are going to be potentially affected by the tariffs, whether they’ll be able to export fewer goods or be buying less from China,” said Mark Grant, managing director and chief global strategist at B. Riley FBR Inc.

Sentiment towards tech may be changing. September could be the worst month for tech stocks since March. In the modern economy, it’s hard to draw a bright line between trade stocks and non-trade stocks. To a certain extent, they’re all trade stocks.

Posted by on September 24th, 2018 at 10:59 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.