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S&P 500 monthly chart through December

S&P 500 monthly chart with 3 and 10 month moving averagesThe S&P 500 opened the month of December at 3,143.9 and proceeded to sell off hard, to 3,110.8 before closing the first day at 3,113.9 – a loss of almost 1% on the day. The next day, the index gapped-down to 3,087.4 and reached its low for the month, at 3,070.3 before attracting buyers and closing higher, at 3,093.2. It was all uphill from there, with the S&P 500 peaking at 3,247.9 on December 27th – a gain of 5.8% from the December 3rd low. On a closing basis the S&P 500 gained 2.9% in December, from the previous month’s 3,141.0 close. In all, this was the S&P 500’s best December in recent history, besting 2016 by a full percentage point.

Looking back at 2019, the S&P 500 opened the year at 2,477 on January 2nd which was just a bit off of 2018’s close, at 2,506.9. From that 2018 close, the index gained a total of 28.9% in 2019 (close-to-close). The S&P 500 lost 6.2% in 2018.

Looking forward to January, it has been a good month for the past two years. Last year, the S&P 500 gained 7.9% after the big pullback in December. In 2017 the index gained 1.8%. In 2016, though, the S&P 500 lost 5.1%. The 3-month moving average is currently 3,136.4 which is 2.9% below December’s close. The index is trading 5.4% above the 10-month moving average of 2,976.7. The moving averages have not been inverted since February of 2019.

The ISM manufacturing index will be released on Friday (though Thursday’s Markit manufacturing PMI will give the market a hint) and the street is looking for a resumption of October’s growth, after November’s slight disappointment (that the market shook-off just fine). I do not think the market will be so forgiving this time, if the manufacturing number misses the estimate (48.4%). I hope everyone had a safe and enjoyable New Year’s!

-- Scrib