Market Digest          
9.27.17          
OBSERVATIONS
Seeking Cover:
Discussion of Current Geopolitical Events  and their Potential Impact on Elevated Market Valuations
Yesterday we hosted another successful installment of our Strategic Discussions series. We were so honored to have Col. James Hickey (retired), Senior Military Advisor to the Senate Armed Services Committee, as our featured speaker. Thank you to all those who were able to attend.

Daryl's comments focused on the areas of great anxiety for investors today, including lofty equity valuations; the potential impact of Fed missteps; the unintended consequences of rolling back QE; and the possible impact of natural disasters and significant geopolitical events. Daryl provided analysis which put each concern in historical and statistical context. Then, using our forecasts for each investment class and our disciplined approach to long term investing, Daryl offered a path forward through the apparent investment minefields investors face today.  Please contact us if you would like copies of Daryl's slides.
 

Col. Jim Hickey was extremely impressive in the scope of his knowledge and his ability to succinctly discuss the global issues we face as a nation. What a rare opportunity it was for us at New Market Weatlh Management, and our guests, to have such a thoughtful and rich discussion with an individual who is so senior in our government and knowledgeable about National Security issues. Col. Hickey spoke candidly about the general preparedness of our military and our capabilities to respond to threats from around the world. He graciously answered questions from our audience members commenting on the North Korean nuclear threat, the ambitions of Vladamir Putin and Russia and the role of Israel in the Middle East.

If you'd like to be included in future Strategic Discussions invitations, please don't hesitate to call us at (657) 900-1899.
MARKET UPDATE
After hitting new highs earlier in the week, the major US equity indexes ended last week mixed. Energy stocks fared well as oil prices hit a three-month high and Financials recorded solid gains. But consumer staples and utilities lagged. Political developments continued to drive sentiment as investors digested the war of words between President Trump and Kim Jong-un and weighed the possibility of passage of a new healthcare bill from Senators Lindsey Graham and Bill Cassidy.
Equity Index Returns through September 22_ 2017
Source: Yahoo! Finance
ECONOMIC NEWS
> The Fed:  At the conclusion of their policy meeting last week, the Fed's statement was largely in line with expectations. They kept rates steady but announced that, beginning in October, they would pare back the amount of bonds in their inventory by reducing reinvestment of interest payments. The Fed also suggested that they will increase interest rates once more this year and three times in 2018. 

Fed and Market Predictions of Future Rate Hikes

> The Bull MarketThe current bull market is now the second largest since World War II, with a gain of nearly 270% for the S&P 500 Index, besting the 267% gain from June 1949 to August 1956. At this point, only the 417% gain during the 1990's is larger. 

Second Largest Bull Market Since WWII

> Pullback Data:   Although stocks have largely sailed right through a seasonally weak period the past few months, October is historically known as the most volatile month . Perhaps the most logical reason to expect a dip is that we've gone more than 10 months without a 3% correction, the second longest streak in the history of the S&P 500. And, it has been 15 months since the last 5% dip, courtesy of the Brexit vote. 

Modest Market Corrections Over Time

NEW MARKETS. NEW ADVICE.
New Market Wealth Management offers modern investment solutions backed by extensive research and experience serving the needs of wealthy families. Through our strategic partnership with Cliffwater LLC , we have access to institutional-quality research, investment due diligence and asset allocation tools. We believe this level of experience and unique access to in-depth, sophisticated research are essential for success in today's complex world markets.

New Market Wealth Management
(657) 900-1899