October 2011- Memorable… for the Stock Market!
October 2011 will be memorable for lots of reasons; the Detroit Tigers got their first ALDS title since 1987, Steve Jobs passed away, and the world didn’t end on October 21st. But the financial world will remember October 2011 for another reason: The fact that it was the Dow Jones Industrial’s best month in 24 years and the Standard & Poor’s best month in 37.
Wait a minute, Money Thinker, I thought we were falling into a recession again? Yeah, so did I, but it looks like this month proved us a bit different than we all thought. Sure, we’re probably still going into a recession, but maybe not as quickly as we thought. Here are a few reasons why.
- Europe’s getting their mess cleaned up. The European Union (EU) was worried about bankruptcy, which dismantled the stock market on the whole. The big financial mess earlier this month came to a resolution this past week. Now, the EU got together and started moving forward, which pushed the stock market to their highest gains yesterday.
- Spending is finally increasing. It may be the coming of the Christmas season that sparked this a bit. Even though incomes have been fairly stagnant, people are spending more and feeling a little more confident that the economy is moving forward.
- More stability. Even though some smaller companies are still floundering, October was a month where we heard little about companies going bankrupt, save the rumors about Kodak at the beginning of the month. Places that were already filing for bankruptcy were still struggling, but a lack of new businesses filing for them is encouraging for any investor.
So when I say that the economy’s done well, what does this mean? Let’s look at some numbers.
In the month of October…
- 17 of 30 Dow Stocks rose.
- 41% of stocks sold above their 200 day selling averages.
- Even crazier? 470 of 500 S&P stocks closed this month in the green.
- The Dow Jones closed today up 27 points.
- This month, the stock market rose almost 10%
Is this a sign of future growth? We can hope, because an economic upturn is what the United States really needs right now. But, we’ve seen hints of growth before, just to end up disappointed. Could it be the holidays? Could it be that people are getting the help they’re need? Or could it be that people are taking risks again to try and fix where they’re at? Maybe people are paying off their credit and able to put money into the economy again?
Who knows? But, something’s going on. Let’s hope it sticks around awhile. Until Monday, spend smart, save smart!
