For the year the S&P 500 has risen now by 8.99% after being up only by 1.67% at the end of the second quarter. Performance slowed in September however gaining only 0.43% after gaining 6.74% in July and August.
Meanwhile, the Russell 2000 is up 10.49% and is still distancing itself from the S&P 500 after lagging for much of 2017 but that gap is narrowing. For the month of September, the Russell 2000 lost -2.54% which was a radical underperformer to the other indexes.
From its peak on June 20th, the Russell 2000 is actually lower by -0.61% which is shocking. But makes sense given the dollar peaked before getting a final blowoff to the upside in August.The Russell struggles against the S&P 500 when the U.S. Dollar is moving lower.
The Dow Jones Industrial Average is higher for the year up 7.04% after dropping-1.81% through the end of June. For September the Dow gained 1.90%.
The NASDAQ 100 and the NASDAQ Composite are now higher by 19.257% and 16.49% respectively in 2018. The NASDAQ indexes did lose ground in September dropping -0.35% and -0.85% respectively.
At this juncture, we would advise to taking profits on NASDAQ 100 stocks that are at all time highs as many are stretched on a valuation basis and any change in investor perception could sending a high flier into free fall. A good example of this has been Facebook (FB) that has dropped by -24.39%.
We will continue to weigh in over the next few days on the returns to bonds, commodities, currencies, foreign markets and U.S. equity sectors.