October 17, 2019 | Newsletters
A. Third Quarter Global Review
US equities made modest gains during the third quarter, despite economic growth concerns and uncertainty surrounding US-China trade talks. Economic growth concerns peaked in August when the Federal Reserve (Fed) suggested that interest rates needed to be adjusted down but not as aggressively as the market was anticipating. During the quarter, the Fed acted as expected by cutting rates by 25 basis points both in July and in September. Going forward they are less committed to further interest rate cuts without “supporting data”. The US yield curve inverted during the quarter, with short-term yields higher than long term yields, a phenomenon which often is predictive of a recession. Despite the ups and downs of the trade war, any concrete plans to comprehensively solve the ongoing US-China dispute seem to be tenuous at best. Investors had another issue to consider as they approached the end of the quarter, the possible impeachment of President Trump. Fortunately for the stock market, the prospect of a formal impeachment leading to the removal of President Trump is highly unlikely and are another futile attempt by partisan politicians to remove a duly elected President.
Read the rest of the newsletter by downloading the PDF below.