Stocks End 1H 2018 With A Dud

Stocks End A Weak First Half

The stock market had a good Friday until the hour before the close where it gave back almost all the day’s gains. The S&P 500 was up only 8 basis points to close out the quarter. The headlines mid-day stated that Nike was pushing the entire market up, but that was clearly wrong as the stock was up 11.1%, but most of the gains disappeared at the end of the session. Specifically, the S&P 500 was at 2,738 at 3:00 PM and closed at 2,718. We’ve seen some odd moves this week which are likely explained by managers closing their books for the quarter.

This was a weak first half for the S&P 500 as it only went up 1.67%. The past week took away gains as the index fell 1.33%. This quarter was mired by fears of a trade war. The CNN Fear & Greed index is at 34 which is fear. It hasn’t risen in the past few days because most of the rallies have reversed lower.

Even though this has been a first half to forget in terms of past performance, it was a great period when you compare it to other countries. The Russell 2000 was up 7% while the MSCI developed international markets index fell 4.7% and the emerging markets index fell 8%. It’s possible that the recent weakness occurred because investors rebalanced their portfolio out of America and into other countries. The Shanghai Composite, which has had a terrible year, was up 2.17% on Friday.

Let’s review some quick stats in terms of market performance for the first half.  4 sectors were up in the first half: consumer discretionary was up 10.8%, tech was up 10.2%, energy was up 5.3%, and healthcare was up 1%. 7 sectors were down. The worst sectors were consumer staples which were down 9.9% and telecom which was down 10.8%. The best industries were internet retail which was up 48.2%, department stores which were up 33.1%, application software which was up 29.7%, and footwear which was up 27.4%. The worst industries were tires and rubber which was down 27.9%, tobacco which was down 22.2%, home furnishing which was down 18.3%, and the homebuilders which were down 17.7%.

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