The Real Money Post Industrial Average (RMPIA) in October saw a 1.3% decline -- but that's only half the story. The rest is that the RMPIA still outperformed the two major market barometers, the Dow Jones industrial average and the S&P 500, as well as the Nasdaq composite index. Also, year to date, RMPIA's performance registered a gain of 21%.
A confluence of factors weighed on equities in October. The resurgence of the coronavirus resulted in fresh restrictions late in the month, fiscal stimulus talks in Washington were scuttled, U.S.-China trade tensions got hotter, Brexit talks dragged on and we had the lead up to a still contentious 2020 presidential election.
The end result saw the major market indexes record their worst month in a while. The S&P 500 shed 2.8%, adding to its September losses and leaving it up 1.2% through the first 10 months of 2020. The Dow fell 4.6%, leaving it down 7.1% so far this year.
Digging into RMPIA's October performance, seven of its constituents -- including Thermo Fischer Scientific (TMO) , Alphabet (GOOGL) , and BlackRock (BLK) moved higher month over month. Declines in the majority of the average's holdings, including double-digit declines at Biogen (BIIB) and Amgen (AMGN) more than offset those gains. Those two companies as well as CVS Health (CVS) and Walgreens Boots Alliance (WBA) have been a drag on RMPIA's year-to-date performance. That year-to-date outperformance for RMPIA was powered by the 72% climb in PayPal (PYPL) , 64% move in Amazon (AMZN) , 48% return in Apple (AAPL) , and the 47% gain in Netflix (NFLX) , as well as the gains in 12 other constituents.
As we put the 2020 election behind us, RMPIA remains well positioned for what's to come in the remaining weeks of the year. Alphabet and Facebook (FB) will continue to benefit from the shift to digital advertising, Amazon and Costco Wholesale (COST) will ride the accelerating wave of digital shopping while Apple, Broadcom (AVGO) and Qualcomm (QCOM) should see positive demand as 5G demand grows. As the coronavirus case counts climb, folks will continue to stream video content from Netflix, Amazon and Apple, and CVS as well as Walgreens are likely to see a surge in Covid-19 testing. The pandemic will accelerate the adoption of contact-free payments, a positive for MasterCard (MA) and PayPal (PYPL) .
(GOOGL, CVS, AMZN, AAPL, FB, COST, AVGO, QCOM and MA are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now.)
