Volatility perspective. The average annual peak-to-trough decline since 1980 has been 14%, very close to what investors have had to stomach in 2018. Average volatility feels worse than average, but putting market swings in context can be reassuring. In a midterm election year the average decline is slightly larger (16%), while even in up years, the average peak-to-trough decline has been 11%. Keep in mind that since WWII, the S&P 500 has never declined in the 12 months following a midterm election (18 for 18), and no recession has occurred when earnings rise, as we expect in 2019. (LPL)

With more people buying online, the number of packages being returned is spiked ahead of Christmas, not after it. For the first time ever, UPS says the busiest day for returns was Dec. 19th. (CNBC)

Valuations have come down significantly. The benefit of market declines is of course that stocks get cheaper. How much cheaper have they gotten? After trading at a price-to-earnings ratio (PE) just under 19 only 11 months ago (based on next 12 month’s consensus earnings estimates from FactSet), the S&P 500 PE has fallen to 15, slightly below the long-term average. Given low inflation and still-low interest rates, and our still positive earnings growth outlook, we believe stocks are below fair value. (LPL)

S&P 500 is up 20 and the NASDAQ is up 52.

Oil is up 112 cents at $46.45 a barrel.

Gold is up $3 at $1287 a Troy ounce.

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.