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The financial crisis and market turmoil of 2008 have prevented many historical trends from holding true this year. For instance, while November and December are typically two of the markets’ strongest months of the year, the performance during those months this year has been far from stellar.
The Dow [.DJIA
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] fell over 5% in November and is on pace for another 5% drop in December. This follows the index’s 14% plunge back in October. In fact, posting a decline in each of the final three months of the year is something the Dow has not done since 1941. For the fourth quarter, the Dow is down 22% - giving it its worst quarter since Q4 1987, when Black Monday struck.
However, one trend that appears to be holding up (at least early on) is the tendency for small cap stocks to outperform large caps during the so-called “January Effect” period (from the middle of December through the month of January). Since 1987, during the last half of December, the Stock Trader’s Almanac shows that the small cap Russell 2000 index rose 3.2%, on average, vs. the large cap Russell 1000 index’s average gain of just 1.7%. The small cap outperformance is evident this year too – since December 15, the Russell 2000 [.RUT
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] is up nearly 3% compared to the flat/breakeven performance of the Russell 1000 [.RUI
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].
As the markets wrap up the year, the Dow (down 36% YTD) is poised for its worst year since 1931. Only 2 of its components are up this year:
- Wal-Mart [WMT
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] up +16% YTD
- McDonald’s [MCD
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] up +2% YTD
GM [GM
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], Citigroup [C
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], Alcoa [AA
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], Bank of America [BAC
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], and American Express [AXP
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] are down -86%, -78%, -73%, -69% and -66% respectively and have been the weakest on the year.
Here’s how some of the other major indices and sectors have performed this year:
- Warren Buffett and Bill Gates spoke to Columbia students, and Buffett made the students a startling offer.
- For the chief of cable company Comcast, growth has been about making deals – generally very large deals.
- Some companies may start using insurance to shift carbon risk from their balance sheets to maybe... yours?
- The president and founder of Genesis Today wants to improve America’s health, and thinks Wal-Mart can help.
- Switzerland's privacy watchdog is taking legal action to force Google to make changes to its Street View service.
- A wealthy, distracted Texas driver crashed his million-dollar Bugatti Veyron sports car into a salt marsh, say police.
Data is a real-time snapshot *Data is delayed at least 15 minutes