Is the Grinch stealing my gains?

Good Morning/Afternoon,

The Holiday Season is upon us but the stock market has been taken over by the Grinch. The news and articles over the past couple of weeks have been negative but yesterday Bloomberg produced an article that presented a more balanced tone and was very informative. A couple of points from the article that stood out were:

1. The 4th quarter has been horrible for stocks this year
2. Investment professionals think that the markets both domestically and internationally are too pessimistic
3. Potential Tradewars, Fed tightening and Brexit (the UK leaving the European Union) are still present within the market throughout the year

What was intriguing about this article is that context matters. The author points out that Wall Street typically leans bullish and that as a whole the economist polled have a horrible track record at predicting recessions. I've been more cautious this year because I did not see the headwinds subsiding and the data released by government economic institutions (International Monetary Fund, Federal Reserve, etc.) was pointing toward a more difficult environment.  Technology companies have been fuel for the market over the past 10 years, but these firms peaked in August and have fallen about 14% (the article used the NASDAQ 100 as a proxy for Technology).

This week saw the most significant weekly outflows from US equity since Lipper started tracking fund flows in 1992. The $46 Billion that exited US equity funds was more than double any other week on record (side note, there is more money flowing into money market funds). With everyone concerned about a recession, it might seem that the sky is falling. But instead what we are experiencing is a regime change as investors are starting to prefer companies that are considered safer based on their high/predictable cash flows and aversion to debt. There are some winners and the pickings have gotten slimmer.

#bloomberg #grinch #wallstreet #stockmarket #tradewar #federalreserve #brexit #UK #EU #NASDAQ #technology #Lipper #fundflows #regimeshift #financialliteracy #financialfloyd

https://www.bloomberg.com/news/articles/2018-12-14/recession-signal-hard-to-miss-if-stocks-are-taken-at-their-word?srnd=premium

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