There was a day or two last December when many people thought the bottom had finally fallen out of the stock market. The long hard-charging bull market, that had only had some minor set-backs, seemed to have finally fallen apart. That dismal notion was short-lived though, as the market recouped and realigned on its former trajectory.
There was fear that the Federal Reserve would take a more aggressive course in raising interest rates, but when that strategy looked like it was going to be laid aside, the market found new legs. This new course has also pushed the yields on 10-year treasury notes down, making the stock market the more likely benefactor of investor dollars.
For the pessimists, 2019 has proven to be another good year for the markets; at least for the first half. The Dow Jones saw its best June in 81 years. The S&P 500 posted its best June in 64 years. And even the Nasdaq saw its best June in nearly 20 years. The Nasdaq was spurred on by several large-cap stocks.
The Winners and Losers
After a lackluster 2018, most of the four major stock indexes have faired well during the first half of 2019. The Dow Jones Industrial average was up 15.4 percent through June 28. The S&P 500 index was up 18.5 percent in that time period. The Nasdaq Composite Index rose 21.3 percent through June 28 and the Nasdaq-100 Index was up 21.9 percent.
Many sectors, that were beat up last year rebounded during the first six months of the year. Consumer discretionary was up 21.8 percent after falling 16.4 percent in the fourth quarter of 2018. Energy saw a nice rebound, finishing the first half of this year up 13.1 percent after dropping 23.8 percent in the last quarter of 2018.
Many well-known Dow companies had a successful first half of 2019, including Microsoft, which was up 32 percent. Credit card providers also fared well during the first six months of the year with Visa up 31 percent and American Express realizing a 29 percent increase. With more discretionary income, consumers were rewarding entertainment companies also. Disney stock was up 29 percent during the first half of the year.
Information technology and networking were also rewarding sectors for investor during the first half of the year with Cisco Systems up 29 percent. Another tech firm that fared well during the first half was Advanced Micro Devices; an S&P 500 stock and restaurant chain, Chipotle, which had come up against some challenges in the past couple of years.
On the other end of the scale was Nasdaq-100 stock Tesla, which was down 33 percent the first half of this year after rising 26 percent in the last quarter of last year. Many brick and mortar retailer continued to have a rough time so far in 2019 with Nordstrom’s down 30 percent through June 28 and Macy’s off 26 percent. Both retailers were also down during the last quarter of 2018.
What the second half of the year looks like will depend on many factors; some geo-political, some related to Fed policy and some related to the general psychology of the market.