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Hey Buddy, Can You Spare A Third-Quarter?

O’Grady here.  A happy October to you.  I wish I could say happy Oktoberfest as well, but that got cancelled.  The real one…in Germany.  Like so many of our favorite events.  And the cancel culture continues, not only events, but people as well.  For thinking the wrong things and not submitting to group think.

Well, no matter what you think about the stock market, you can’t cancel it.  And it couldn’t be stopped in the third quarter.  Third quarter…the arbitrary period of time pundits like to measure  things with.  In our case, the three month period ending as September runs out.

And what a third quarter it was.  The S&P 500 climbing 8.5%.  The DOW up nearly 8%. And the NASDAQ rising 11%.

Sure, a couple speed bumps in September, but the month wrapped up with a win.

And if you add in the second quarter of this year, it was the best two-quarter performance we’ve seen since 2009.

Mainstream media might have skipped right over all that.  Because that doesn’t fit their bad news agenda.

With all the bad news, what’s driving the market?  Mostly peaceful consumer spending.  No surprise there.  Let us out of our houses and we’ll spend more money.  And that’s good for business and the economy.   The analysts and pundits like to call it consumer spending.  How about a more simpler “Americans Buying Stuff” or ABS for short.

Mostly peaceful hiring.  Yes…that’s up.  How could it not be.  

And the Federal Reserve, the tinkerers of interest rates, say hands off.  We’re leaving ‘em low.  Not going to touch.  Maybe for years.  The market likes low rates.

And I’m glad you said hands off to this.  According to the WSJ, stock funds saw record weekly outflows recently, the most since 2018.  That means people pulled their money out of their mutual funds, their long-term investments, likely because they got scared and couldn’t handle a little September rain.  

I say they probably tested positive for R-G Syndrome.  Reverse Grandpa Syndrome.  That’s where one sells low in a panic, and waits for the market to go back up again so they can buy back the same investment at a higher price.  Sell low…buy high.

Maybe they couldn’t understand their grandpa clearly through his mask.  But he probably said just the opposite, buy low…sell high, sonny boy.  At least that’s what my grandpa told me.