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The year is now half over and the stock market has been doing rather well. We’ve had new record highs for the Dow Jones Industrial Average, the S&P 500 and the NASDAQ. We also had a record winter in the Northern Sierra with some of the best skiing in a long time. Squaw Valley has been able to stay open through July 4, and they have not been able to do that since 2011.
Record snow and new records for the stock market is a nice combination, hopefully the trend will continue. The Dow Jones Industrial Average was up 8.03 percent in the first half of the year, and hit an all time high of 21,535.03. The S&P 500 returned 8.24 percent for the first half with a new record of 2,453.82. The technology heavy NASDAQ has pulled back a little bit lately, but also has returned 14.07 percent in the first half and set a new record of 6,341.70.
Most of the S&P sectors have had good returns so far this year, too. The only sector that posted a negative result was the Energy sector with a drop of minus 13.81 percent. Health Care was the best performing sector with a gain of 14.94 percent. Technology was the next best performing sector with a return of 13.15 percent.
Precious metals have been rebounding so far this year, too. The gold Exchange-Traded Fund (ETF), GLD has put up a 7.67 percent gain and the silver ETF is up 3.97 percent. The price of crude oil has fallen 17.54 percent so far this year. The drop in the price of crude oil has been good for consumers, as the price of unleaded gas has fallen at the pump.
According to AAA, the national average price of unleaded gasoline is down to $2.26 per gallon. Unfortunately, California has the most expensive gas in the nation at a price of almost $3 per gallon. It has been said that every penny saved at the gas pump puts $1 billion a year into consumers pockets to be spent elsewhere in the economy.
Stocks typically trade with relatively low volatility in the summer months, and on average the volatility is the highest in the fall. Earnings reporting season will get going in earnest later this month when Alcoa kicks off the reporting season on July 19. Hopefully, the earnings for the quarter will be good and the bull run can continue.
Kenneth Roberts is a Truckee-based Registered Investment Advisor. Information is at his blog at http://www.sellacalloption.com or 775-657-8065. The mention of securities should not be considered an offer to sell or solicitation to buy investments mentioned. Consult your investment professional to understand the risks and/or how the purchase or sale of these investments may be implemented to meet your investment goals. Past performance is no guarantee of future results.