I had a stock market question come in Wednesday. As always, thank you for your questions, comments, and conversations. For starters, the gentleman agreed that US stock indexes remained in major (long-term) uptrends, but was wondering if some money could be pulled from stocks and put into other investments*.
- Markets showing long-term bullish fundamentals (e.g. Crude Oil, a variety of Softs markets, US Treasuries)
- Regarding Treasuries, the gentleman also brought up the possibility of paying off debt to reduce interest payments
- This equation would need to include things like locked in or variable rates
- Is existing interest rate high or low
- Could the money earn more in stocks (or other markets) than interest saved?
- Safe-haven markets to stay ahead to the ongoing chaos by those around the world looking to create political and economic change
As mentioned in Wednesday’s Afternoon Commentary, the S&P 500 hit a new high of 5,796.80 before closing at 5,792.04. The index is up 50% since completing the bullish spike reversal at the end of October 2022 (Green B on chart). Additionally, the index is up roughly 270 points from its July settlement of 5,522.30. Why does this matter? Recall the political study that looks at the S&P 500 index activity the three months before a US presidential election, from the July close through the October settlement, with the research** showing:
- A higher close for that three month period indicating the party in power stays in power
- A lower close for that three month period indicating the opposition party moves into the White House
* I also wrote about this in my latest piece for Barchart. You can read it here: (LINK)
**Study: (LINK)
