Market Commentary, 10/01/18

Both the Dow and the S&P 500 got off to a shaky start last week, ending the week down 1.1% and 0.5% respectively. The NASDAQ climbed 0.7% after declining the previous week.

September was a solid month for stocks. The Dow recorded its fourth straight positive month with a gain of nearly 2%. The S&P 500 had a 0.4% gain in September, marking its sixth straight monthly increase. The Nasdaq broke its five month streak with a slight decline for September.

The third quarter was positive for all U.S. market indices, with large cap and tech stocks outperforming mid and small cap stocks. The Dow added 9.0%, the S&P 500 was up 7.2%, and the Nasdaq gained 7.1% for Q3.

U.S. consumers shrugged off trade and tariff concerns, as a monthly indicator of consumer confidence hits an 18-year high for September.  This measure is the degree of optimism of the U.S. economy according to consumers, based on saving and spending. It is organized by The Conference Board, an independent economic research organization, and is indicative of the consumption portion of the GDP. Specifically, the reading bodes well for spending in the upcoming holiday season, with a strong economic outlook and robust job growth bolstering Americans’ outlook for the future. (www.wsj.com)

As we predicted in last week’s commentary, the Fed raised interest rates for the third time this year. The latest projections are that the rate will increase one more time this year, three times in 2019, and once in 2020, potentially resulting in a rate of 3.25% by 2020. It is clear from the Fed meeting on Wednesday that these projected increases are due to strong economic growth, low unemployment, and stable inflation.  (www.money.cnn.com)

While we typically focus on the prior week’s news, it is worth mentioning that last night’s agreement with Canada to revise the North American Free Trade Agreement (NAFTA) has spurred the stock market today. This agreement, as well as those with Mexico and the European Union, appears to be reducing global trade fears.

Regards,
Jeremiah Patterson, CFP^®

Copelin Financial Advisors
514 Brooks Street
Sugar Land, TX 77478
Phone: 281 240-2902
Fax: 281 240-2856
jeremiah@copelinfinancial.com

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