October 23, 2019

Market News – Fall 2019

Fall 2019 Quarterly Newsletter

Author: Kristopher W. Carroll, CFA®, CFP®

 

The end of the third quarter is shaping up to be an interesting and positive time for most investors. Despite some periods of high volatility, U.S. equity markets stand well above where they started this year and are still relatively close to all-time highs.

 

Interest rate volatility has remained high over the past few months as well. The ongoing struggle between the Federal Reserve and the current administration is somewhat unusual. Regardless of the cause, the Fed has been lowering rates and reversing some of the interest rate hikes from 2018. Ultimately, lower rates are good for stocks and give us reason to be optimistic. However, rates on longer-term bonds have been unusually volatile and continue to reflect a market belief that the Fed will cut rates at least two more times in the coming months.

 

We continue to watch economic data for signs of inflation. So far the only data indicating higher inflation has been temporary and seems to right itself quickly. Trade negotiations and tariffs will raise the prices on some goods, but it remains to be seen if these higher prices are broad enough to impact overall levels of inflation considered relevant by the Fed.

 

We believe the risk of recession is higher today than it was this time last year, but we are not predicting one and believe that this slow growth economy could continue.

 

Political discourse as the election heats up in 2020 may add to volatility. We believe that investors today should be close to their long-term stock allocation and should keep the interest rate risk in their portfolios low. As always if you have questions about your account or the economy, give your advisor a call. We look forward to hearing from you.

 

This article was featured in our Fall 2019 Quarterly Newsletter available here:

 

Required Disclosures: The views stated in this letter are not necessarily the opinion of Cetera Advisor Networks LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change with notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.

Market Update, Market Volatility

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