 The Market Sum | Insight after the bell
By Caleb Silver, Editor in Chief
Friday's Headlines 1. Markets Manage Slight Gains Despite More Trade Uncertainty 2. S&P 500 Notches Yet Another Record 3. Global Asset Returns Year to Date 4. Sentiment Tilts Towards Greed, But Asset Allocation is Still Cautious 5. What to Expect Next Week Markets Closed
Year-to-Date
 Image: Getty Images
Markets Today Just a day after the Chinese trade ministry said that it had reached an agreement with its U.S. counterparts to simultaneously roll back existing tariffs, President Trump rolled back their proclamation and said he had never agreed to any such thing. That knocked the wind out of the market's momentum as losses spread from Asia through to Europe. U.S. markets spent most of the day in neutral, but rallied into positive territory to close the day, making a new record high for the S&P 500.
U.S. markets rose for the fifth week in a row, and 2019 is shaping up to be one of the best performing years in decades across multiple asset classes. Here are the major U.S. markets, year to date.
chart courtesy YCHARTS 
To be sure, 2019's gains come on the heels of 2018's steep losses, so we need to maintain perspective. Very few people start investing at the beginning of the year and keep score on the calendar year, but the perspective is important.
When we look at the performance across asset classes year-to-date on an annualized basis, it's even more interesting, and reminds us of the value of diversification. 
Remember, these are returns on an annualized basis, and we still have close to 30 trading days left in 2019. Anything can happen.
What's also interesting is that despite the historic returns for risk assets like stocks and commodities, money is still flowing heavily into cash. According to research from Bank of America, these are the fund flows on a cumulative basis, year-to-date:
Cash + $549 billion Even as the market has raced higher, setting multiple records along the way, investors have favored cash, which is the worst performing asset class year-to-date.
At the same time, the mostly positive news around the trade talks has caused most sectors of the market to rally, despite weakening fundamentals. We know that earnings and sales growth are slowing, and global GDP is fading. However, global markets are rising due in part to the trade talks, and also due to negative and low interest rates around the world that are pushing investors into stocks in pursuit of yield. It's very unusual and unpredictable.  Greed Trumps Fear One of the gauges I like to check from time to time is CNNMoney's Fear & Greed Index, which I had a small hand in developing several years ago. It measures investor emotion, but based on technical and fundamental analysis like stocks above their 50-day moving average, volatility as measured through the Put to Call Ratio for options, market breadth, and other metrics. It doesn't measure money flow, but it does track several metrics that tell the story of investor sentiment at a given time. Right now, it is peaking into EXTREME GREED. It's not that individual investors are feeling particularly greedy, because they are not, according to the American Association of Individual Investors. It's just that the recent rush into stocks, which is both seasonal and a product of the positive trade talks, has pushed the metrics underpinning the stock market into the greed zone. Just a month ago, the Index registered FEAR. The pendulum has swung very quickly, even though the fundamentals underpinning the companies in the stock market have not.
It's a good time to be careful, and heed the words of this man.
photo credit: Bill Pugliano/Stringer  "It is wise to be fearful when others are greedy and greedy when others are fearful."
What to Expect Next Week Here's a brief look at the week ahead.
Monday: U.S. Bond Markets Closed for Veterans Day. Other U.S. Markets Remain Open.
NFIB Small-Business Optimism (Oct.)
U.S. Consumer Price Index (Oct.)
Producer Price Index (Oct.)
U.S. Retail Sales (Oct.)
Alibaba Seeks Second Listing: (chart courtesy YCHARTS)  Chip maker Qualcomm rose 4.5% today on better than expected earnings from increased licensing deals. Entertainment conglomerate Disney rose 3.7% in anticipation of the launch of its Disney+ streaming service next week, for more on that see above.  Clothing retailer The Gap fell 6.6% today on news that its CEO, Art Peck, is leaving, and their plan to spinoff their Old Navy brand seems to be faltering. Media firm News Corp fell 4.1% on disappointing earnings. Word of the Day Demonetization  Image Source: Twitter
Today in History 11/8/16 Today in 2016 Indian Prime Minister Narendra Modi announced that, overnight, the two largest denomination bills, 500 and 1000 Rupee bills, would cease to be legal tender. Modi said this was an effort to fight terrorism, corruption, and tax evasion, as well as to encourage people to adopt digital payments. The plan made 86% of the cash in circulation illegal overnight, and new bills equal to about 10% of the previous stock of cash had been minted, so the cash supply dropped by 75%. Studies have shown significant short term disruption due to this, but long term effects are unclear.
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Friday, November 8, 2019
The Roll Back
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