Weekly Market Review - September 27, 2018

Weekly Market Review - September 27, 2018

by Chad Hassinger on Sep 27, 2018

Finance

By Bradley J. Rathe, AIF®
Chief Investment Officer

"Technology is a useful servant but a dangerous master." Christian Lous

Weekly look back:
  1. Housing Data continues to lag behind prior year numbers as inventory is low and rates are higher.
  2. The market is still "Tarified by Tariffs" and continues to be the biggest driver of volatility.  On and off news on China trade talks is pulling the markets around.  There seems to be some better news coming from NAFTA, especially Mexico, and some of our Asian trading partners.
  3. International macro data had a pullback early in the year but data has started to turn the past few months.  International equity markets have lagged the US so far this year but that may be about to change as their data starts to look better.
Weekly look ahead:
  1. FOMC meeting this week and they are expected to raise rates by .25% to 2.25%.  We expect the Fed, over this rate rise cycle, to peak rates at 3% by the middle of 2019.  This is one of the main factors to watch for any potential future recessions as the Fed raises beyond what the economy can handle.
  2. US GDP growth is a beacon for the rest of the world at this time.  Expectations are for a reading of 4.3% for the final Q2 2018 number.
  3. Durable Goods has historically been one of the most volatile economic series.  Mainly the cause of this varied number comes from the commercial aircraft component.
World Macro highlights for this week: 

Tuesday: Consumer Confidence, Housing Price Index
Wednesday: FOMC Meeting, New Home Sales
Thursday: GDP, Durable Goods, Corporate Profits

2018 Yearly Index Returns as of 9/21/2018

S&P 500 

10.89%

Europe Equity

-1.64%

Emerging Equity

-8.20%

US 10 Yr

+.59 bp

US Small Cap Stocks

12.44%

 

Graph Of The Week

Real GDP growth (Nominal GDP - Inflation) is expected to stay strong through mid-year 2019. 

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