 |
| Snapshot of FXAIX Today |
The S&P 500, as measured by proxy FXAIX dipped to the $180 level and tested as high as $200+ within the last week. That is a 10% gyration in mere days. Investors have swayed from optimism due to Fed rate cuts and pessimism due to expanding war in the Middle East (Israel vs. Iran proxies Hamas & Hezbollah in Lebannon).
When Trump was elected in 2016, FXAIX was valued at ~$65. Contrast that to today, Oct 02, where the same fund is valued close to $198+. That is a 14% CAGR over the 8 year period. 4 of those 8 years were during the Trump administration, and 4 under Biden. The S&P appears more volatile in 2024 than in 2016 with a higher standard deviation (roughly twice) of $4 vs $2. However normalized to the average, the volatility in 2016 is higher 2.5% vs 2% over that trailing 63 days.
Compare 63 consecutive days in 2016 spanning the election to 63 trailing days in 2024 ending Oct 02, 2024
 |
| 2016 FXAIX was relatively stable, even over the surprise election Trump result |
Macroeconomic Factors
- Record S&P and Mega Cap valuations (AAPL at 3 Trillion Market Cap)
- Record US Debt with no plan to curb (Dollar devaluation on horizon?)
- Ukraine, Gaza and Lebanon conflicts
- Nuclear proliferation
- Covid and post Covid Inflation
- Investors seeking havens in higher dividend stocks, alternative assets (eg Bitcoin/gold)
- China stimulus begins to take effect in late September, early October 2024
- China population decline, housing supply glut
- US housing un-affordability, massive spike in cost of living due to inflation
- FED announcements to lower rates, but amid persistent inflation
- US manufacturer trend away from China Contract Manufacturing, which began 3-5 years ago over Covid.
No comments:
Post a Comment