Daily Capital

What Moved the Markets in November?

The Trade War

Stocks marched higher in November, driven by optimism for a “Phase One” trade deal with China and indications suggesting continued accommodative monetary policy from the Fed. Regarding trade, we view signs of cooperation between China and the US as a positive, but think it is important to remember that the relationship is incredibly complicated and is likely to remain unpredictable and adversarial in nature for a long time.

Investor Sentiment

As recently as September, we noted a bullish factor for stock prices was an appearance of widespread pessimism about the economy and equities. Markets often reflect current positioning and move against popular opinion. Indeed, markets climbed this wall of worry and posted strong returns for both October and November, pushing large cap US stocks to record highs. Now, it feels sentiment has swung to the other side, with many recently bearish market participants throwing in the towel and piling back into stocks. Sentiment is just one factor, but our view is it is no longer one to be excited about.

The Tool To Beat

US Growth Stocks

As money returned to stocks, a disproportionate amount funneled into what has felt best recently – specifically US growth stocks with a tech focus, further stretching the valuation gap from both value and international stocks. As these distortions grow, we see the expected forward-looking benefits of increased regional, style and sector diversification also increasing.

Read More: Market Commentary

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Craig Birk, CFP®
Craig Birk leads the Personal Capital Advisors Investment Committee and serves as Chief Investment Officer. His focus is translating improvements in technology into better financial lives. Craig has been widely quoted in the Wall Street Journal, Bloomberg, CNN Money, the Washington Post and elsewhere. Prior to Personal Capital Advisors, he was a leader within the portfolio management team at Fisher Investments, helping assets under management grow from $1.5 billion to over $40 billion. Craig graduated from the University of California at San Diego and has earned the Certified Financial Planner® designation.

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