In 2018, the United States economy continued to expand as unemployment fell to 3.9% and gross domestic product (GDP) expanded by an estimated 2.9%. Despite the positive economic performance during the year, the stock market experienced extreme volatility with asset prices climbing, falling dramatically and then rebounding.
- The broad-based S&P 500 index climbed by approximately 6.8% before falling 17.5% from its high and then rebounding 4.8% to close the year down 8.4%.
- The Dow Jones Industrial average climbed by 5.7%, dropped by 16.1% and then rose 4.4% to finish the year down 7.9%.
- The Nasdaq climbed by 13.6%, fell by 21.9% and then surged 6.4% to finish the year down 5.6%.
Reflecting a bearish sentiment, EBITDA (earnings before interest, taxes, depreciation and amortization) multiples — one of Wall Street’s favorite metrics of profitability — for all three indices also declined over the 12-month period:
- Dow Jones Industrial Average fell from 13x EBITDA to 11.1x EBITDA
- S&P 500 dipped from 12.8x to 11.1x EBITDA
- Nasdaq declined from 16x to 13.7x EBITDA
According to MarketWatch, the market seesaw reflected positive factors such as economic data and corporate earnings and negative factors such as concerns about potential inflation, trade policy uncertainties and geopolitical issues.
Against this macroeconomic backdrop, the physical security industry continued its growth. For the 12 months ending Sept. 30, 2018, the production value of physical security products grew by 8% to $31.55 billion. more