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After a Meandering Summer, Resilient Market Breaks Out

September 6, 2019
After a Meandering Summer, Resilient Market Breaks Out

Some of our readers might remember an old black and white TV commercial about a Timex watch in which the manufacturer attached the timepiece to a motorboat engine blade; shot it at a wall using a bow and arrow, and dropped it in a washing machine, among other tests of resilience. In the commercials, at least, it always passed with flying colors: “It takes a licking but keeps on ticking.”

That pretty well describes the U.S. stock market. The S&P 500 index (SPX) had every reason to break to downside in the past month, as the looming litany of bearish arguments grew larger seemingly by the week—the inverted yield curve; the U.S. Treasury 10-yr note yield below 1.5%; the ISM falling below 50 (which suggests contraction); the VIX (fear index) surging, and President Donald Trumps “threats” to close the Federal Reserve Board.

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