What September’s Market Resilience Says About Stocks: Searching for Alpha for October 2016

On September 9^th, the bears appeared to be running the table.

Investors were concerned that a month of central bank announcements would lead to a market pullback. Concerns about the end of easy money, sky-high equity valuations and lack of economic growth in Europe seemed to confirm trader’s worst suspicions, as the S&P 500 fell over 2.5% that day. But in the weeks that followed, the markets were able to shake off the gloom. So what gives? 

Apparently, those arguments just weren’t enough to end the 7 ½ – year bull market.  News of the improving domestic economy was certainly a plus, along with less hawkish news from the ECB and the Fed. And with interest rates so low, the current high valuation of stocks seem to not be enough of a catalyst to push the markets lower.