Today marked the last time Finnair flight 666 departed Copenhagen, Denmark for HEL.
HEL is not where evil sinners are tormented for eternity, but the three-letter code for the airport in Helsinki, Finland. The airline has flown flight 666—traditionally the Devil’s number—21 times on Friday the 13th, but is retiring the flight number.
Fortunately for the passengers, the pilot wasn’t deterred by the ominous symbolism. “I’m not a superstitious man,” he said. “It’s only a coincidence for me.”
He could well have been talking about investors, too, because Friday the 13th looked like just another lucky day in a bull market that looks as if it will never end.
It’s almost getting tiresome to write, but the Nasdaq Composite index closed at yet another new all-time high, just above 6,600. The S&P 500 and Dow Jones Industrial closed just below their record closing highs, and the Dow is within one-half of a percentage point of 23,000.
What could give this market the evil eye?
Not much, for now. Inflation is below the Federal Reserve’s target, so although Chair Janet Yellen wants to “normalize” the federal funds rate above its current 1-1.25%, inflation is so low the Fed can find little justification to actually hike rates.
There’s no sign of recession, either. Unemployment hit a multiyear low last month, at 4.2%, while GDP grew at a 3.1% annual clip in the second quarter. That likely won’t be sustained throughout the year, but on Wednesday the International Monetary Fund (IMF) noted “an accelerating cyclical upswing boosting the major economies” and boosted its projections for world GDP growth to 3.6% for this year and 3.7% for 2018.
And although analysts expect year-over-year earnings growth to drop to only 2.1% in the third quarter (whose results companies will begin to announce soon), they also anticipate a return to double-digit earnings growth in the fourth quarter, continuing through the first half of 2018.
So, as one Wall Street wag, Doug Ramsey, chief investment officer of the Leuthold Group, said, stocks’ up trend is so strong it would take an “immaculate conception” or divine intervention to stop it.
That’s exactly why I think this is a good time for caution. The CBOE Volatility index, the VIX, is back under ten and apparently headed lower, which means complacency is high. Though there are few overt signs of euphoria, stocks are moving up effortlessly, which is just when you have to start worrying.
It would probably take a real crisis with North Korea—not just the tough talk we’ve been hearing—to prompt a big sell-off. I’m not rooting for that to happen, but if it does, the market’s streak of good luck, even on Friday the 13th, would run out.