After the best December in recent history, the S&P 500 could not keep the ball rolling in January. After closing 2019 at 3,230.8 the index pushed higher to 3,337.8 on January 22nd, before losing steam (catching a cold?) and closing the month at 3,225.5 – 3% off its high.
Looking ahead to February, the S&P 500 closed 4% higher in 2017, 4% lower in 2018 and 3% higher last year. At 3,225.5 the index is 0.8% above its 3-month moving average (3,200) and a whopping 7% above its 10-month moving average (3,015).
We will get a peak at the ISM manufacturing index on Monday. It has disappointed for the past two months, but market reaction has been quite muted. It is difficult to make a case for a turnaround in manufacturing, with Boeing’s ongoing 737 MAX issues combined with the weakness in auto sales. The coronavirus is still a bit of a wildcard, but reduced air travel and plant shutdowns in China do not look good for either side of the supply and demand equation.