Weekly Market Analysis: Navigating Ongoing Volatility

Firstly, I’d like to say thank you to all of our clients and users. We here at Personal Capital deeply appreciate your trust and engagement, and we look forward to continuing to serve you all in the coming decades. Also, I would like to thank all my fellow employees here at the company – it is a privilege to work with so many intelligent, and motivated individuals. Thank you all.

This week in the markets we saw continued volatility, with two major US Indexes, the Dow Jones Industrial Average and the S&P 500, closing below their 2018 starting points (notably, this is not the first time this has occurred this year).

Oil prices also continued their weeks long decline as concerns around oversupply and overall global economic strength continued to push prices lower. OPEC, the Organization of Petroleum Exporting Countries, will be meeting in early December to discuss output. As a point of interest OPEC was founded in 1960 and was originally comprised of 5 countries: Venezuela, Saudi Arabia, Kuwait, Iran and Iraq. Currently there are 15-member countries who share OPEC’s Mission:

“The mission of the Organization of the Petroleum Exporting Countries (OPEC) is to coordinate and unify the petroleum policies of its Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry.”

Weekly Returns

S&P 500: 2,633 (-3.8%)
FTSE All-World ex-US(VEU): (-2.1%)
US 10 Year Treasury Yield: 3.05% (-0.91%)
Gold: $1,223 (0.1%)
EUR/USD: 1.133 (-0.7%)

Major Events

• Monday – Markets declined with Technology stocks leading the way. Some of 2018’s high flying stocks such as Apple closed down significantly – Apple was down nearly 20% from its 2018 high on Monday.
• Monday – The Price of a Bitcoin, worth nearly $20,000 a year ago, fell below $5,000.
• Tuesday – President Trump continued to contradict the Central Intelligence Agency’s assessment from the prior week that Crown Prince of Saudi Arabia Mohammed bin Salman was involved in the killing of reporter Jamal Khashoggi.
• Wednesday – US Markets rebounded from Monday and Tuesday’s declines.
• Thursday – Happy Thanksgiving!
• Thursday – While much of the US was celebrating a day of Thanks, the EU and UK closed in further on terms around Brexit.
• Friday – Oil Prices continued their decline, with prices hovering between $50-$60 a barrel.

Our Take

Monday and Tuesday’s market declines, followed by Wednesday’s bump, illustrate that uncertainty is keeping many investors on their toes – eager to avoid the next fall, or capture the next bump.

Here are several of the influential factors that are likely driving uncertainty: ongoing trade concerns between the US and China, economic growth and company earnings in the US, whether the Fed will continue to raise interest rates or will instead take a softer approach, and Brexit, to name a few.

I’ve had clients come to me over the past several weeks with very differing opinions on the near-term future of the markets – some thinking now may be the time to get out, others thinking now may be the time to buy. Everyone has an opinion, but our stance remains this: stay focused on a long term, diversified approach, that accounts for your personal goals, and your thoughts on risk. We have been doing this for years at Personal Capital, and if you’ve been thinking about better diversifying of late, consider speaking with an Advisor about your situation.
With this said, we wish everyone an excellent weekend, and again, thank you!