The Q3 Crystal Ball
This fiscal year putting you through your paces? Half-time, we’re at the six-month mark, so it’s time for the Invstr community to take stock of 1H20, and regroup for 2H20.
If you think you know what surprises lie in store for the rest of this crazy 2020, let your stock picks show it. We predict a meteor shower, mass rebellion, more freak weather, UFO sightings, and a sinkhole underneath parliament.
In all seriousness, though, this third quarter could be big. It’s when economists predicted the end of global shutdowns and the beginning of a record-breaking market rally. Those predictions haven’t aged well. We’re seeing the end of global shutdowns, but the beginning of a rally?
The S&P 500 has already zipped higher in these past three months than in any same period since the dot-com bubble, Q4, 1998. The record for quarterly gains came in Q4, ’99, when the tech-heavy Nasdaq was yeeted up a euphoric 50%. One quarter later, however, fortunes were down 20%. Incredibly, it took sixty-four quarters after that for the index to set another all-time high.
When today’s market sees strong economic data, like home sales this week or private-sector job gains, stocks go up. But don’t sell the skin before you’ve caught the bear. We can’t celebrate too early on these figures because if the virus isn’t contained, then we’re not ready for millions of people to go back to work. It’ll backfire, and you know what happens to the stock market then!