Weekly Market Review - October 3, 2018

Weekly Market Review - October 3, 2018

by Chad Hassinger on Oct 3, 2018

Finance

By Bradley J. Rathe, AIF®
Chief Investment Officer

"All the great things are simple, and many can be expressed in a single word: freedom, justice, honor, duty, mercy, hope." Winston Churchill

Weekly look back:
  1. FOMC increased rates by .25% to 2.25% as expected.   Expectations are that there will be one more rate rise in December to make four rate hikes for 2018. FOMC anticipates three more in 2019.
  2. GDP rose 4.2% in the second quarter and the GDP price index had a sharp move higher by 3%, spurring more inflation fears.
  3. Durable goods advanced from a spike higher in civilian aircraft orders, however, when you remove aircraft orders the number was lower than predicted.
Weekly look ahead:
  1. Unemployment rate is expected to drop to 3.8%, considered very close to full employment.  Payrolls are likely to show strong gains, however the numbers will be pulled down from the recent hurricane in North Carolina.
  2. ISM (Institute for Supply Management) manufacturing and non-manufacturing surveys more than 300 firms to get a forward look at how each sector is doing.
  3. Housing has been a drag on the economy so far this year because of low inventories and rising mortgage rates.  Construction Spending was relatively flat so housing continues to struggle.
World Macro highlights for this week: 

Monday: ISM Manufacturing, Construction Spending
Wednesday: ISM Non-Mfg index (Services), PMI Services
Friday: US Jobs situation

2018 Yearly Index Returns as of 9/28/2018

S&P 500 

10.38%

Europe Equity

-3.56%

Emerging Equity

-8.91%

US 10 Yr

+.65 bp

US Small Cap Stocks

11.51%

 

Graph Of The Week

Corporate Profits surged 6.4% in the second quarter. Taxes on Corporate profits fell 34% from last year. 

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