32 Days Is A Long Time Without a Record For U.S. Stock Investors
By Callie Bost
A couple of paychecks, maybe a haircut and a trip to the movies — not much typically happens in a month. But for investors waiting for the next all-time high in U.S. stocks, it?s actually been a long time.
While equity indexes from Asia to Europe have climbed to multiyear highs in recent days, the Standard & Poor?s 500 Index and Dow Jones Industrial Average last hit theirs on March 2, the same day the Nasdaq Composite Index topped 5,000 for the first time in 15 years. The 32-day stretch without celebrating a fresh high is the S&P 500?s longest since July 2013.
?We think the investor has gotten a little bit spoiled,? said Jim Russell, a Cincinnati-based portfolio manager at Bahl & Gaynor Inc., which has about $8 billion under management. ?The market has reached a valuation level where more things have to go right, in that earnings have to come in strongly and interest rates have to remain low. Without the Fed in QE, fundamentals matter more this year.?
In most respects, American equities occupy the same space they did in 2013 and 2014, preserved from protracted losses and never more than 3.7 percent away from the high hit on March 2. It?s been three years since the S&P 500 experienced a 10 percent drop and measures of options-based volatility are below historical averages.
Still, day-to-day swings have been more pronounced. The S&P 500 slid in five of seven sessions from March 2 through March 11, including two declines of 1.4 percent or more, amid concern a stronger dollar and lower oil prices would hurt earnings as the Federal Reserve considers raising rates.