Now that the third trading quarter has started after a stormy first half, investors hope for an auspicious July. Both stocks and precious metals saw amazing developments in the second quarter. The S&P 500 ended the period April to June with an increase of almost 20%, its best quarterly performance since 1998. The Dow Jones Industrial had its best quarter since 1987.It is worth noting that the stock market also suffered a sharp 20% + decline in 1988 – and as is known in 1987 – in the second half of the year. In a volatile equity trading environment, a big move in one direction tends to make a big move in the other direction. At the beginning of the year we already saw a significant downward movement – and a subsequent upward movement of a similar magnitude.
Bull run ahead?
The bull run caused stocks of leading technology giants, including Amazon, Apple and Microsoft, to reach new record highs. Smaller, conventional companies that are more directly linked to the fate of the real economy have not held up so well. The question is whether the general stock market will correct to reflect a hollowed-out economy that remains partially quarantined … or whether stocks will continue to rise in response to artificial fiscal and monetary stimulus.