Need to Know: What the stock market’s record-busting move means as Jackson Hole ramps up

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The S&P 500 is trying to nab a weekly win, as everyone fixates on the annual Jackson Hole jamboree for central bankers.

Federal Reserve bossman Jay Powell may talk about fighting the next recession, after the Dallas Fed’s chief buckaroo shared his dream of getting interest rates up near 2.75%.

Their Wyoming musings come in a week that’s seen the S&P score its first record intraday high since January, as well as deliver arguably the longest bull market ever.

So you might be wondering: What’s the takeaway for investors from this record-busting action?

It can feel really hard to jump into U.S. stocks around a new peak, but it has paid off historically, say Ritholtz Wealth Management’s Josh Brown and Bill Sweet for our call of the day.

When prices have never been higher, it’s psychologically difficult to buy, they note.

“It’s the worst feeling on earth, until three years later,” says Brown, in a YouTube video recorded with Sweet. “The only feeling worse is if you don’t.”

The duo trots out all sorts of historical data to support their bullish view.

Looking at the Dow’s action over roughly a century, Brown and Sweet point out the blue-chip gauge has averaged a dozen new highs a year. In other words, it’s not so rare and scary. As Sweet puts it: “One per month.”

On average after notching a fresh peak, the Dow is up 32% five years later, they add.

“Not a lot of people think, ‘I’m going to buy an all-time high and on average, five years from now, I can expect to see the market a third higher,’” says Brown, known for his Reformed Broker blog. “But that’s actually what the experience has been over the last 100 years.”

The S&P 500 on Tuesday traded at a record intraday high above 2,873.

Brown and Sweet also emphasize that when stocks hit an all-time high in any one month, they have a 90% chance of achieving another record within four months.

“90% — does it get better than that in investing probability?” Brown says. “If you have this ‘Gambler’s Fallacy,’ where you see a new high and your immediate reaction is, ‘Well, that’s the top,’ it literally works in the opposite direction.”

Watch their full video below.

Key market gauges

Futures for the Dow YMU8, +0.21%  , S&P 500 ESU8, +0.22% and Nasdaq-100 NQU8, +0.30% are modestly higher, after the Dow DJIA, -0.30%  , S&P SPX, -0.17%  and Nasdaq Composite COMP, -0.13% dipped yesterday. The Dow is on track for a weekly fall of less than 0.1% as of Thursday’s close, while the S&P and Naz are up by 0.2% and 0.8%, respectively.

Europe SXXP, +0.30% is mostly gaining, after Asia largely closed lower. Oil US:CLU8 and gold GCZ8, +0.37% are advancing, as the dollar index DXY, -0.26% retreats. Bitcoin BTCUSD, +1.94% is trading around $6,500.

See the Market Snapshot column for the latest action.

The chart
WSJ
China’s markets are shuddering? The S&P 500 doesn’t care.

Exactly three years after a Chinese crash rattled stocks around the world, a fresh bout of turmoil over there doesn’t seem to have the same shock value, says a Wall Street Journal report that features the chart above. The graphic shows the S&P 500 and Shanghai Composite SHCOMP, +0.18% heading in different directions this year.

The U.S. is seizing on China’s vulnerability and claiming an advantage in the ongoing trade fight, notes a separate Journal story. This week’s trade talks between the U.S. and China failed to produce any visible sign of progress.

Don’t miss: Trade-war tracker — here are the new levies, imposed and threatened

The buzz

Fed chief Powell’s remarks are due to come at 10 a.m. Eastern Time. Here’s how Jackson Hole may shake up markets.

Foot Locker FL, +2.05% is on the earnings docket ahead of the opening bell.

OMG, SRSLY? P&G PG, -0.18% is reportedly trying to trademark LOL, NBD and other millennial-friendly terms.

AMD’s stock AMD, +6.65% closed yesterday at its highest price in nearly 12 years after Wall Street’s most bullish analyst hiked his price target even higher.

Arista Networks ANET, +1.89% is joining the S&P 500, taking the place of real estate investment trust GGP GGP, +0.69%  , which is being bought out by Brookfield Property Partners BPY, -2.53%  .

Ross Stores ROST, +1.73%  , HP HPQ, +0.57% and Gap GPS, +0.71% look on track for down days after their earnings late yesterday, while Autodesk ADSK, -0.46% appears headed in the other direction.

Intuit INTU, +1.32% said its CEO and CTO plan to step down, as the seller of Turbo Tax also posted better-than-expected earnings.

Tesla TSLA, -0.48% headlines: A small fire broke out at the car maker’s factory in Fremont, Calif., and Elon Musk reportedly has hired Morgan Stanley MS, -0.97% as he considers taking the company private.

On the data front before the open, we’re due to get a reading on durable goods orders.

See: MarketWatch’s Economic Calendar

President Trump news: The National Enquirer had a safe with damaging Trump stories, and the president is blasting Attorney General Jeff Sessions again this morning, tweeting “look into all of the corruption on the ‘other side.’”

The Australian dollar AUDUSD, +0.6071% is gaining after conservative lawmaker Scott Morrison was named as the country’s new prime minister.

The quote
Getty Images
A car becomes submerged Thursday in floodwaters from Hurricane Lane in Hilo, Hawaii.

“Everyone on Oahu should be prepared to take a direct hit.” — NOAA’s Richard Henning is among the meteorologists tracking Hurricane Lane and talking about how the coming hours are crucial.

Read more: Hawaii braces for up to 30 inches of rain as Hurricane Lane closes in

And see: As Hurricane Lane hits Hawaii, here’s what travelers need to know

Random reads

People are tipping 100% in the #tipthebillchallenge.

Heartwarming: Pink stops her concert Down Under to comfort a 14-year-old fan.

Chicago is the world’s second-biggest Lithuanian city, notes this week’s Economist.

No amount of alcohol is good for your overall health, study says.

10-year-old boy injured in Yellowstone’s first reported bear attack since 2015.

Have you heard about Arizona’s “KFC drug tunnel” that ran to Mexico?

Fire fallout: SF’s air quality is 3 times worse than Beijing’s.

“The road to the record has not been smooth,” says this video:

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