U.S. markets advanced again in September with the S&P 500 up 0.57%. Strong earnings growth has been the catalyst for domestic equity markets reaching all-time highs.
We expect that the equity markets could be volatile for the remainder of the year, as pending trade tariffs are adding uncertainty to the economic outlook.
The U.S. imposed tariffs on $200 billion of Chinese goods and China retaliated with $60 billion in tariffs on U.S. goods.
Recent strong economic numbers have pushed the 10-year Treasury yield to a seven-year high, slowing equity market momentum.
International developed equities outpaced the U.S. markets in September but a stronger U.S. dollar combined with worries over tariffs pressured emerging market equities.
The second quarter GDP report was quite strong. The rest of the year is expected to be softer due to fading benefits from tax cuts and stronger headwinds from trade.
The Fed raised interest rates 25 basis points in the September meeting and signaled one more increase this year. The term “accommodative” was removed from their statement.
International equities look attractive over the long term based on improving economic growth and attractive valuations.
- This information has been compiled using data and other statements of fact derived from sources which we believe to be accurate and reliable. However, such data and other statements of fact have not been verified by us, and we do not make any representations as to their accuracy or completeness. Any opinion expressed herein reflects our judgment at this date and is subject to change.