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“It’s clear that no matter what the Federal Reserve and Chairman Jerome Powell did and said at the final monetary policy meeting of the year, they couldn’t make stock investors happy. Despite the Fed doing what had been expected, which was boosting interest rates for the fourth time this year and cutting its 2019 forecast to two hikes from three, the S&P 500 went from being up as much as 1.54 percent to down as much 2.25 percent.
The Fed’s decision should have been good news for stocks, as any more of a dovish tilt would have raised concern that the Fed sees the economy deteriorating much faster than thought. East West Investment Management Co. market strategist Kevin Muir captured the zeitgeist in a blog post before the Fed’s statement when he wrote that “the market has talked itself into believing the Fed will err on being dovish, so the bar has been raised for Powell’s performance.” Perhaps, but the reality is that the equities market has been on a steady decline since early October and the path of least resistance, especially with the year rapidly coming to an end, is lower. What we know is that the stock market is poised to set its low for the year in December for only the sixth time in the past 91 years. When that happens, stocks are typically either in a long-term downtrend for a large part of the year or break violently lower in December, according to Bianco Research. This is significant because when this happened in the past, the following year was not a good one for equities. Recessions occurred in four of the five subsequent years and stock returns “were nothing short of a disaster,” according to Bianco, with losses averaging 18.4 percent. The lone exception to a recession was 1941, when the Pearl Harbor attack caused the market to drop to a new low that December. While 1942 did not experience a recession, stock returns suffered for the first half of the year before rebounding to end 12.4 percent higher.”
JJ Editor's Picks
"Not even what one might think of as the most basic tenet of any religion, a belief in the existence of God, is a prerequisite: Agnosticism is a key principle of at least one major school of Hindu philosophy."
"The presidency of any particular incumbent is relatively short... but the precedential consequences of impeaching a president without complying with the specific provisions of the Constitution “as it was written” are enduring."
"After news that a judge allegedly provided sexual favors to Bar Association president Efi Nave in exchange for her appointment, several politicians said in their responses that the Judicial Selection Committee needed to be the “Holy of Holies.”"
"Two new documentaries take on Billy McFarland and his disastrous music festival... the secret villain of this story all along: the subtle menace of social media marketing."
"Eating out, ordering in. Throw in a bagel here, a coffee there, and it all adds up. "It's definitely a challenge for people my age to save on food.""
"Popular music is shrinking. From 2013 to 2018, the average song on the Billboard Hot 100 fell from 3 minutes and 50 seconds to about 3 minutes and 30 seconds. "
"Here in the good old U.S. of A, the third annual Women's March planned for Jan. 19 is in serious trouble, thanks to irreconcilable political disagreements."
"Nature, however, with its endless cycles of death and rebirth, fascinated her. Walking in the woods, she developed a method that has become the hallmark of her poetry, taking notice simply of whatever happens to present itself."
"Modern parents haven’t stopped playing favorites; they’ve just stopped doing it openly. Though few parents today will admit they have a favorite child, studies indicate that about two-thirds of parents do."
"The first science-based diet that tackles both the poor food eaten by billions of people and averts global environmental catastrophe has been devised."
"Sphen and Magic looked like they would make great, diligent, careful egg-warming parents. They made the biggest nest, and they sat on it constantly."
"How YMHAs, followed by synagogue-centers, and finally JCCs have tried—in different ways—to balance Judaism and Jewishness, by bringing Jews together in intellectual, spiritual, and physical pursuits"