Weekly Market Review - October 17, 2018

Weekly Market Review - October 17, 2018

by Chad Hassinger on Oct 17, 2018

Finance

By Bradley J. Rathe, AIF®
Chief Investment Officer

"Your attitude, not your aptitude, will determine your altitude." Zig Ziglar

Weekly look back:
  1. Equity volatility picked up last week as investors started to get concerned about higher US interest rates.  Additionally, growing geopolitical risks spooked investors to reduce risk.
  2. Both Consumer (CPI) and Producer (PPI) inflation were moderate and gave some relief to bond investors that future rate hikes may be slower.
  3. Future sentiment readings may get dented, yet recent sentiment has stayed strong as inflation is low, jobs are plentiful and growth is on track.  Thinking towards the next month's mid-term elections, the confidence in the government's economic policies is the highest in 15 years.
Weekly look ahead:
  1. Retail sales flopped in their most recent reading, as consensus was for an advance of .6% but actual was only .1%.  This number was mediocre by all accounts, but we expect better readings as we close out the year.
  2. FOMC minutes from the last meeting will be scrutinized to gain insight into future rate increases.  Currently, we anticipate there will be one more this year and two more next year prior to pausing.
  3. Housing starts are expected to fall in September, partly from the slowdown from Hurricane Florence, however, stronger readings are expected in the future as housing permits have accelerated.
World Macro highlights for this week: 

Monday: Retail Sales, Empire State Mfg Survey, Business Inventories
Wednesday: FOMC Minues, Housing Starts
Thursday: Leading Economic Indicators, Philly Fed Business Survey

2018 Yearly Index Returns as of 10/12/2018

S&P 500 

4.84%

Europe Equity

-9.23%

Emerging Equity

-13.98%

US 10 Yr

+.75 bp

US Small Cap Stocks

1.62%

 

Graph Of The Week

Capacity Utilization is an important indicator to anticipate future inflationary pressures. A reading above 79 starts to be concerning.

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