With a record 15-month win streak for the S&P 500 on a total return basis still alive as of the end of January 2018, there is little doubt that market participants have been spoiled by the lack of volatility and upward bias in equities. The past week has been a harsh reminder that pullbacks do happen and although it is never fun when it happens, remember that this is a normal part of investing and illustrates why having a plan in place ahead of such pullbacks is so important. Could this weakness continue? Absolutely. But, we do not believe this is the start of a new major bear market; more a potentially healthy shakeout of weak hands. (LPL)
Monday was Jerome Powell's first day as Fed chair, and the S&P 500 dropped 4.1%, marking the worst daily drop since August 2011. We also saw the largest jump ever for the CBOE Volatility Index (VIX) up 115%, closing above 37 for the first time since August 2015. The Dow closed down 1,175 points, which was the largest point drop ever. However, to put things in perspective, it was only the 112th largest percentage drop ever (since 1896). Some streaks ended as well, as the S&P 500 finally corrected 5% for the first time in 404 days (the longest ever), while the S&P 500 turned negative year to date for the first time in 403 days (fifth longest ever). (LPL)
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.