• The S&P 500® was down 2.77% in October, bringing its YTD return to 1.21%.
• The Dow Jones Industrial Average® lost 4.61% for the month and was down 7.14% YTD.
• The S&P MidCap 400® increased 2.09% for the month and was down 7.89% YTD.
• The S&P SmallCap 600® returned 2.49% in October and -14.16% YTD.
The fairy tale continued in October, as the S&P 500 reached 3.04%, reversing last month’s decline (-3.92%), with all 11 sectors up, and getting back on the upward track of recovery from the low on March 23, 2020—that is until the week of Halloween, when the market’s treat turned to trick. The initial cause of the lack of candy, also known as Phase Four, was that it was suddenly taken away, as Congress left town for the election, without passing a relief bill. While some blamed the pre-election political fighting for the lack of passage, more saw the market’s belief that it would get its candy now as the issue. As for the spark (I think Shakespeare said it best, “your houses”), the quick market turnaround produced broad declines for the S&P 500 (-5.64% for the week), leaving the spooky month of October in the red (-2.77%), as uncertainty around politics took over the Street. Even earnings, which still dominated individual trades, were unable to reassure the market, as 85.2% of them beat their estimates (which were lowered by 29.9%); perhaps if one or two of them would have offered some forward guidance… then again, if they knew, they would tell. Meanwhile, COVID-19 case count has been rising in the U.S. (along with the yardstick seven-day average) and has set daily new records.