Red Hot Stock Market

By: Matt Garrott

The stock market is either red-hot, extremely average, or still in recovery depending on your perspective.  Let’s torture the data until it tells us what we want to hear.

The red-hot stock market

The S&P 500 is up 18.5% and we’re only halfway through 2019!  Unemployment is incredibly low.  Inflation can’t seem to stay above 2%.  The market expects the Federal Reserve to cut rates and Chairman Powell’s dovish remarks encouraged bulls.

Silicon Valley’s unicorns are frolicking in the public markets.  Pinterest, Zoom, and Uber are up from their debuts, but the real story is fake-meat.  Beyond Meat, a plant-based meat substitute company has soared since its IPO.

The extremely boring, historically average stock market

The S&P 500 is up 10.4% over the last 12 months, in line with its historical average of 10.2%.

Workplace messaging company Slack decided to do a direct listing of its shares, skipping much of the drama that can come with a technology IPO.  A direct listing does not raise funds for the company, but is a way to provide liquidity to investors.

The still-recovering stock market

The S&P 500 has barely recovered from the near-bear market of 2018, up only 2% since the September 21st high.  International stock markets are still slow.  Germany, Japan, and Switzerland are all issuing negative-yielding government debt.

Ride-sharing company Lyft struggled in its IPO, leading some to wonder just how much value is left in the big tech companies once they go public.

What is really happening?

The one true market story is the individual investor’s story.  Needs, goals, and timeframe are all unique to each person.  Someone with a long-term financial plan can ignore market events.  Their plan changes according to life events (retirement, for example) instead.

Fairway Scorecard 6-30-2019