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U.S. stocks ended the week slightly lower after reaching new all-time highs last week, with the S&P 500 Index dropping 0.5%. Materials, financials and consumer staples were among the biggest detractors, while telecom, health care and technology moved higher. U.S. Treasury prices and the dollar also advanced and oil prices ended the week up 3% amid growing concerns over tightening supply as a result of U.S. sanctions on exports from Iran.
Vicissitudes in the market should not come as a surprise, equity prices simply don’t move in linear fashion. However, we are entering the fourth quarter (when markets typically post the strongest returns of the year). In theory, investors can breathe a sigh of relief during this time of year. We are not postulating a linear move higher heading into year-end, but we have analyzed data collected on S&P 500 performance from 1980-2017. The way we see it, the final quarter of the year has generated average gains of 4.59%, compared to gains of 2.34%, 2.67% and 0.3% for 1Q, 2Q and 3Q, respectively.
