While March saw a slight increase in three of the four indexes we track, the quarter turned out pretty good for stocks across the board. They are all up from 11% to 16% in the first quarter of 2019. I know the financial channels on TV are pushing how great the stock market is this year because of the first quarter results. But they don’t seem to remember what happened in the fourth quarter of last year, at least they don’t talk about it. For those of you who don’t remember, it was a bloodbath for the entire stock market from October through December. And while the talking heads on TV are all puppy dogs and rainbows about this year, the market is still negative when compared to where they stood on September 30th, 2018. Will the markets finally reach new highs in April? Who knows? But as of now, the raging Bull Market that started on March 9, 2009 ended on September 20, 2018. If the S&P 500 and Dow break new highs this year, this cyclical Bull Market will officially be more than 10 years old.
I know that we all get a little nervous when we think about how long the market has gone now without a major bear market. And there are plenty of people who are telling us the big bear is just around the corner. I get emails from them just about every day. However, there are other statistics that point to a continuing market rally. These statistics you may not see reported on your nightly newscasts. But they point to the fact that the economy is, indeed, continuing to excel. For example; the three most productive oil fields in America (Bakken, Eagle Ford and Permian) produced 1.2 million barrels of oil per day in 2008. In 2017 those three areas produced 6.6 million barrels per day. Two years ago it took 70 days to bring a new well on line as a producing well. Today it takes 10 (source: US Energy Information Administration). In 1990 US Corporate Pre-tax Profits were about $450 Billion. In 2018 they were about $2.4 Trillion. According to the World Health Organization, the US, Canada, England and Australia have the cleanest air on the planet, while Africa, India and China have the dirtiest. In 1990 the US employed over 19 million manufacturing workers, who produced less that $600 Billion of output. In 2017, just a little over 12 million manufacturing workers produced about $2.2 Trillion of output (source: Bureau of Economic Analysis, US Bureau of Labor Statistics). All these increasing numbers are the result of advancing technology. And we’re just getting started on developing artificial intelligence.
However, we shouldn’t let all this information make us believe the market can’t fall like a stone. It can. It did in December, remember? I do. Vividly! While all our market trend indicators were stuck on positive, keeping us invested, the market plunged in December. While I have a lot of research to do before tweaking our models, I have discovered something in the daily research we get that should keep us from falling prey to that again. If we can’t continue to learn and get better, what good are we in the long run? So hang in there with us. Russ, Cindy, Pamela, Ginny and I are working hard every day to make the lives of our clients a little easier, simpler and more prosperous.