As has been the case for most months for some time now, the last trading day was a downer. The markets will likely get a little beginning of the month bounce, aided by some favorable reviews of the speech by President Trump last evening. I managed to get real-time headline notifications on the speech by way of several iPhone apps while I was attending the NY Rangers game, at the World’s most famous arena, Madison Square Garden.
March could be a tricky month. After a strong beginning of the year, in which the S&P 500 (SPX) has rallied 5.57%, the market has some big shoes to fill this month. There is some interesting historical data worth considering as we enter the month:
- Since 1950, the SPX has risen in both January and March twenty-six (26) times, not counting 2017.
- In nineteen (19) of those years, the SPX also rose in March
- In twenty-four (24) years of those twenty-six occurrences, the SPX rose from March till the end of the year. The two declining instances were 1987 (the crash year) when the SPX declined by 13.06% for the rest of the year; and 2011 when the index declined 5.25% the rest of the year, likely due to the downgrade of US Treasury debt.
- The average performance the rest of the year after a consecutive January / February rise was +12.02%
- In a post-Presidential election year, the SPX rises on average in the Month of March.
So, as you can see, there are some positives in the tea leaves for March and the remainder of 2017.
We do have several obstacles to overcome in March:
- Next Friday, March 10 is the February jobs report. Currently there are no consensus estimates to report. We will likely get them next week.
- On The Ides of March, March 15, the FOMC will announce its interest rate policy decision. The market expects a 0.25% increase in the Fed Funds target rate with a 40-50% probability. I think that will change dramatically, in either direction, after the February non-farm labor report is released.
- The Ides of March is also the day upon which the debt ceiling extension expires.
My presentation at The Money Show on Monday was well received. Welcome to my new subscribers who were in attendance. If anyone would like a copy of the presentation (without my commentary, please send me an email). I am headed back west to Nevada on Thursday and will have more commentary next week.
In the meantime, I continue to take my lead from President Trump when it comes to sector selection such as construction, infrastructure, healthcare and financial services. As we learned yesterday from Target (TGT), retail is a mess.
Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView AssetManagement, LLC was long AAPL, SPXL & SSO — although positions can change at any time.
Scott Rothbort is the President & Founder of LakeView Asset Management, LLC, a registered investment advisor specializing in high net worth private wealth management. For more information on investing with LakeView Asset Management, LLC call us at 888-9LAKEVIEW or request more information by clicking on the contact button on the top right hand corner of the website. LakeView Management, LLC is a Nevada LLC, with its principal office located in Henderson, NV and branch office located in Millburn, NJ
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