The Rally May Pause, but Not Expire
IT'S NOT EVERY WEEK THAT THE MARKET SERVES up next year's headlines, but this could be one of them. Here we are, a couple of days shy of sneaking into November without any sign of the usual goblins of September and October, and it's obvious that in a year the scribes will be suggesting that this normally bloodthirsty patch of the calendar might have been defanged forever.
In any eight-week period, a market that goes up in such an orderly and vertical fashion as this one would be worthy of remark. But this run has come in what the almanac tells us are the most challenging months of the year, and in a typically nasty swatch of the electoral cycle to boot.
Again last week, stocks refused to hand back any of the 12% rally logged since the lows in July, further defying the doubters and latecomers a ready chance to layer on some equity risk on a downtick. Friday's lethargy, amounting to a loss of 73 points on the Dow Industrials on fairly heavy volume, was the first vague hint of vulnerability evidenced by the tape in weeks.
Even after Friday's pullback -- coinciding with a predictably spongy third-quarter GDP growth print of 1.6% and a firming of crude-oil prices -- stocks managed their fifth straight week of gains, as gauged by the Dow and S&P 500.
The Dow added 87 points, or 0.7%, to finish at 12,090, and the S&P 500 advanced 8, or 0.6%, to 1377, its highest level since November 2000. The Nasdaq Composite rose 0.4%, its fourth weekly gain in the last five, to reach 2350.
The market is never forthcoming with its motivation for why it does what it does. Sure, the dramatic tumble in energy prices, along with receding bond yields, abetted the rally that has stretched from midsummer into the chilly weeks of early fall. The stopped-clock bulls will point to not-bad valuations, lopsided earnings "beats," hungry buyout shops, more-than-ample liquidity (Japan is the margin lender of choice these days) and favorable seasonal patterns.
But more important to the rally's legitimacy and persistence, to date, has been the reluctance of the huddled masses of investors to buy into it. Didn't we hear all summer that the September-October period -- especially in the fearsome mid-term election year -- was a reliable excuse for the market to punish investors? Now that this scripted gut check has been forestalled, the question is whether we can rest easy and simply let the birthright of a fourth-quarter rally wash over us.
Well, the bulls have earned the benefit of the doubt here. The Dow could quickly (and, for latecomers, painfully) pull back below 11,500 -- and this kind of sharp break is overdue, given the recent relentless march higher -- without jeopardizing this latest uptrend.
From everything visible in the market, however, it seems that the first pullback in this rally would be bought.
Consider that, in the third quarter, fewer than 20% of actively managed large-cap stock funds kept pace with the S&P 500. Even worse, according to Birinyi Associates, the best-performing 50 stocks in the S&P in the first half (up an average 12% through June) lost an average 15% in the third quarter. And the worst 50 stocks in the first half (down 2.5%, on average) rose an average 22% last quarter.
Talk about your whipsaw. And how many portfolio managers in early January would have confidently told clients that he was betting aggressively on telecoms (up 29% year to date) and General Motors (GM) up 75%?
This is another way of saying that lots of folks haven't gotten their share of this rally and are itchy for a chance to make amends.
For certain, this atmosphere of performance anxiety is getting plenty of credit for the relentless, daily bid in the market. Lots of skeptics about the rally -- and there are still plenty -- have been trotting out the notion that mutual funds and hedge funds whose fiscal years end Oct. 31 are simply gunning stocks higher, a source of demand that presumably will expire within days. It's plausible. But so was the idea that the end of the third quarter on Sept. 30 and the passing of October's options expiration a week ago would give the market a reason to succumb to selling pressure.
If not Halloween, do I hear Election Day?
It's true that this unabating climb means that the market will fairly soon seize on some excuse to pull back, possibly in alarming fashion. And perhaps the lack of a September-October scare means simply that we'll make an unusually early fourth-quarter peak. Last year's furious fourth-quarter rally, after all, climaxed the day after Thanksgiving, and the market was lower seven months later.
The public, presumably, will chase this rally at some point, though it hasn't happened quite yet. And maybe, say, the upside reversal Thursday in Black & Decker (BDXK) -- a trendy housing-related short -- was an indicator of some telltale capitulation by short sellers? We'll need more time to know for sure.
If you'll forgive a quote from Douglas Ramsey of Leuthold Group a second straight week, he's also watching the relevant signs of the rally's stamina:
"A more subtle sign of denial may be some of the 'conspiracy' theories I've encountered in the past couple of weeks. One version is that the 25% drop in crude, 800,000 new jobs appearing out of thin air (via data revisions) and the decline in the consumer price index can't possibly be just coincidence with elections coming up. Again, it's not the theories themselves that I find interesting but the ongoing attempt to rationalize or explain away market action. I take it as another sign of short-term staying power."
股市或暂歇脚，涨势却未终结
股市并非每周都能创造历史，但上周可能却是这样一周。还有2天就要进入11月了，而通常9月份和10月份会出现的那些不好迹象目前尚无踪迹。显然，这两个通常会令投资者血本无归的月份今年可能就这么无声无息地过去了。
无论是在什么时候，股市能够连续八周如此一往无前地上扬都是值得大书一笔的，目前的情况就是这样。但这种上扬是出现在股市一年中处境通常最险恶的月份，而同期进行的中期选举活动又十分惨烈。
还是在上周，股市较7月份低点累计上扬12%的业绩没有丝毫减损，这使得那些对牛市持怀疑态度的人以及对股市上扬持“酸葡萄”心理的人再次哑口无言。而道琼斯工业股票平均价格指数上周五在股市成交量巨大的背景下下跌73点，则成为数周来首个隐约显示股市脆弱性的迹象。
尽管股指在上周五出现了回调──有关部门这一天恰巧宣布美国第三季度的经济增长率如预期那样只有1.6%，而油价在这一天又开始持稳──但道琼斯指数和标准普尔500指数上周仍实现了连续第五周上扬。
道琼斯工业股票平均价格指数上周累计上涨了87点，收于12,090点，涨幅0.7%；标准普尔500指数上周累计上涨8点，涨幅0.6%，收于1377点，创下2000年11月以来的最高水平。那斯达克综合指数上周累计上涨0.4%，收于2350点，在过去五周中有四周出现上扬。
推动股市上涨的内在机理从来不是那么显而易见的。诚然，大幅下跌的能源价格、不断走低的债券收益率对从仲夏到初秋的股市上扬助了一臂之力。而一门心思看涨股市的人还会指出，许多股票的市盈率普遍不错、众多公司发布的收益都“好于预期”、企业并购正进行得如火如荼、股市上的流动资金也非常充裕（日本最近是一个重要的资金来源）以及技术图形显示目前是投资股市的有利时机等。
但迄今为止更能说明股市本轮上扬的合理性及持久性的一直是，投资者不愿意相信那些对股市不利的言论。我们不是整个夏天都听人说9、10两个月──特别是在中期选举年──是股市投资者很容易蒙受损失的时期吗？既然这种预先设想的不利局面已被化解，剩下来的问题就是通常都会出现的股市第四季度上扬行情能否顺利上演。
当然，近来在对股市前景的预测中总是看涨人士笑到最后的。在不伤及最新这轮上扬行情的情况下，道琼斯指数有可能迅速回调至11,500点以下，鉴于股指最近一路高歌猛进，股市出现这类大幅回调的时机已经成熟。
不过，从市场上目前的情况来看，此轮反弹走势中出现的首次回调将引来大量买盘。
值得关注的是，第三季度只有不到20%的积极管理型大型股基金跟上了标准普尔500指数的上涨步伐。更糟糕的是，根据Birinyi Associates的数据，上半年标准普尔指数成份股中表现最好的50只股票（到6月平均上涨了12%）在第三季度平均下跌了15%。而这批股票中上半年表现最差的50只股票（平均下跌2.5%）则在第三季度平均上涨了22%。
想想你从中蒙受的双重损失吧。有多少基金经理会在1月初就自信地告诉客户，将大胆地投资电信类股(今年以来共上涨了29%)，或想到通用汽车(General Motors)会上涨75%？
这从另一个角度说明许多人在这轮涨势中并未获得相应的回报，正在寻找补涨的机会。
显然，这种急于获利的心态导致市场上每天都涌现出大量疯狂的买盘。许多对上涨持怀疑态度的人──目前仍有很多──一直表示，财政年度将于10月31日结束的共同基金和对冲基金是推动股票走高的主要因素，而这种需求动力在几天内就会消失。这种说法看来似乎有些道理。但9月30日第三季度结束时和一周前10月份期权到期时也有这种看法，认为市场将在卖出压力下回落。
如果不是万圣节，中期选举日是否会成为借口呢？
的确，这种势头丝毫不减的攀升意味着市场很快就会找到一些回调的借口，可能会以预警的形式出现。也许缺少9至10月份时的恐慌只是意味着股市在第四季度初达到高点后就将一路下泄。而去年第四季度的股市飙升是在感恩节后才达到高潮的，此后的7个月股市一直处于下跌之中。
在某种程度上说，公众很可能会追高，尽管目前还未出现这种情况。也许，Black & Decker上周四的触底反弹就说明卖空阵营已经有所瓦解。我们需要更多的时间来寻找答案。
我们要连续第二周引用Leuthold Group的道格拉斯?莱姆西(Douglas Ramsey)的看法，他也在关注同反弹持续能力相关的迹象：
“过去两周里我遇到的一种更为老到的悲观看法是所谓的‘共谋论’。其中一个版本是，原油价格下跌了25%、可能新增80万就业人数（经数据修正）和消费物价指数的下降同即将到来的大选并不只是巧合。而且，这些理论本身并没有什么，有趣的是希望以此判断或解释市场走势的做法。我将其视为短期内股市将保持上涨动力的有一个迹象。”
Michael Santoli
