October 2015 Market Update
U.S. equities closed the Friday trading session lower, though stocks finished off October with one of the strongest monthly advances in four years. With earnings reports flooding the Street, Dow members Exxon Mobil and Chevron joined the majority of companies that have bested their quarterly expectations. Treasuries and crude oil prices were higher, while gold and the U.S. dollar were lower. In economic news, personal income and spending and consumer sentiment missed forecasts and regional manufacturing activity surprisingly expanded.
The Dow Jones Industrial Average (DJIA) decreased 92 points (0.5%) to 17,800, the S&P 500 Index lost 10 points (0.5%) to 2,079, the Nasdaq Composite declined 21 points (0.4%) to 5,054, and WTI crude oil declined $0.53 to $46.59 per barrel.
Personal income was 0.1% higher month-over-month (m/m) in September, below the Bloomberg forecast of a 0.2% rise, while August's 0.3% increase was revised to a 0.4% advance. Personal spending rose 0.1% m/m last month, below expectations of a 0.2% increase, while August's 0.4% gain was unadjusted. The final October University of Michigan Consumer Sentiment Index was unexpectedly revised lower to 90.0 from the preliminary level of 92.1, and compared to the forecast of an upward revision to 92.5. However, the index was up from the 87.2 level in September.
Treasuries were mostly higher, with the yield on the 2-year note flat at 0.73%, while the yields on the 10-year note and the 30-year bond declined 3 basis points to 2.14% and 2.93%, respectively.
European equities finished mixed, mirroring the results from a flood of earnings reports in the region. Stocks in Asia finished mixed with traders digesting the Bank of Japan's (BoJ) monetary policy decision to keep its stimulus measures unchanged, despite signs of slowing economic growth and inflation that is running below its target. Stocks trading in mainland China and Hong Kong dipped amid some mixed earnings reports from the nation's largest banks, while consumer products companies tied to baby goods rallied to limit losses after the announcement that the government ended its one-child policy.
Concerns about a Fed rate hike were likely tamped down by another dose of mixed U.S. economic data, with disappointing durable goods orders being impacted by the slowing manufacturing sector, while the first look at 3Q GDP showed growth slightly missed expectations. Stocks also likely continued to rally with concerns about a federal government shutdown being taken off the table.
It was a down quarter / year-to-date for almost every asset class. For US equities, only growth stocks held on to their gains with large growth up
- Since 1950 there have been 59 different 10 year periods (rolling periods). The S&P 500 has produced a positive total return
3/15/2018 The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in February on a seasonally adjusted basis after rising 0
1. Returns for 10 year time horizon:
- Global Equities: 3.9% total return (due to
For at least the second January in a row, we can report a strong market, strong economy and good prospects for the new year. Unlike last January,
The second longest bull market in American history continues. In a couple months we will mark the 9th anniversary of the low point for
The US market seems to be excited about corporate tax cuts and is charging ahead. Interestingly, value stocks kept up with growth over the past
US economic growth recorded its second straight quarter of 3% GDP growth, earnings are beating estimates, interest rates and inflation are low. It
It was a great three months for equity markets. International stocks continue to shine. Emerging markets increased 7% for the quarter and are up
The US economy is still strong. Jobs are growing, unemployment is very low partially due to the historically low labor participation rate,
US sectors Financials, Healthcare and Technology continue to drive the returns for US growth stocks. Consumer stocks and energy stocks are lagging
US growth equities continue to rise for the year. US value equities are barely breaking even. The growth equities are up mid-single digits for the
Two groups have done well this year: mega caps (like members of the Dow Jones Industrial Average) and lower profitability growth companies (per
Looking back it’s been a good couple of months and quarter (Dec – Feb). US growth equities are beating their value
The consistent performance of US small cap equities and to a lesser extent value stocks (all sizes) has aligned the returns for the quarter and
The year and the quarter come to a close and if you look at the one year returns it looks very orderly but we know it wasn’t. All the US equity
GDP for the third quarter was revised up from 2.9% to 3.2%. Unemployment is below 5%. Initial jobless claims have been below 300,000 for the
Portfolios allocated across several asset classes held on to their year to date gains and in all but the most conservative case have exceeded the
Value investing continues to lead the way for US equities. Large cap growth is the laggard so far this year and this may be the first year in
August was hot outside but the equity markets were only lukewarm. The reversion to longer term performance averages continues which means value
If you could avoid the daily news and market fluctuations, it was a good quarter. It was good even if you did follow the news. It just may not
Value equities especially US continue to outperform growth equities. Large value is up 6.8% year-to-date vs. -2% for Large growth. Small value
Consumer Price Index – April
The consumer price index for April (released May 17th) showed a .4% increase in
US value equities have now consistently outperformed their growth brethren this
If emerging markets could speak, they might be saying, “I told you so.” MSCI Emerging Markets Index has been at the bottom or next to the bottom
Wednesday, March 16th was a big day for macroeconomic news. The Consumer Price Index (CPI) also called the headline inflation rate was
US value stocks have continued to outperform their growth counterparts this year but it is masked by the fact that all US equity asset classes are
January was a wild month in the equity and bond markets. There are many wild predictions being thrown around both optimistic and pessimistic.
01/22/2016As we write this, the S&P 500 is climbing again. Its price is within a couple points of an all-time high set on February 28,01/04/2016
2015 In Summary
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On a rolling03/06/2015
Stocks are again near record highs after a dismal January, echoing 2014. The U.S. economy remains in growth mode despite a decline in the02/04/2015
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The foundation of personal finance is saving. Specifically, we mean the establishment of an emergency fund. In order to guarantee that this key08/20/2014
Inflation is not dead!
But it isn’t grabbing headlines, either. The Bureau of Labor Statistics of the Department of Labor released the07/30/2014
I had a professor at the University of Georgia who taught business law. We learned enough to be dangerous and know that we needed a lawyer to