Thursday, November 17, 2016

November Is Usually A Good Months For Stocks

Market Summary
Investors cautiousness heading into the presidential election have got November off to a dismal start for the stock market. However stocks reversed course and is on pace to maintain November's historically positive performance. Jeff Hirsh in the Stock Trader’s Almanac talks about how November begins the “Best Six Months” for the DJIA and S&P 500, and the “Best Eight Months” for NASDAQ. Small cap stocks start percolating in November but don’t usually take off until the end of the year. November is the number-three DJIA and number-two S&P 500 month since 1950. Since 1971, November ranks third for NASDAQ. November is also a very strong month for the Russell 2000. November maintains its status among the top performing months as fourth-quarter cash inflows from institutional investors drive November to lead the best consecutive three-month span November-January. In the updated S&P sector graph below, stocks in the Financial sector are soaring the past month. A combination of an anticipated December Fed rate hike and expected Republican evisceration of Dodd-Frank regulations are driving investors to bid up financial shares. The next best performer is the Industrial sector which is expected to benefit from Trump administration stimulus spending.

By Gregory Clay
Investment Strategist
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