Better-than-expected corporate earnings and reports that the US and China are close to finalizing "Phase One" of a trade agreement combined to push US Equity markets near all-time highs last week. The S&P 500 increased 1.2% for the week to bring its gains for the year to 20.6%; it is now within 0.2% of its all-time highs. The Nasdaq rose 1.9% for the week and is now up 24.2% for the year, while the Russell 2000 (small-cap stocks) was up 1.5% for the week to bring its gains for the year to 15.6%.
Global equity markets pushed higher as well on the backs of healthy corporate earnings despite the lack of a Brexit deal, which now may go into December. Developed Markets rose 1.2% for the week and is now up 13.6% for the year. Emerging Markets was up 1.2% for the week to bring its gains for the year to 7.3%.
US Interest Rates continue to tick higher heading into this week's Fed meeting. The yield on the 10-Year US Treasury rose to 1.79% last week from 1.75% the prior week, as investors have become more optimistic that US-China trade tensions should ease. Despite that, the Street is currently placing over a 90% probability that the Fed lowers the Fed Funds rate by another 0.25% at its meeting this week.
Of Interest to Us
US Corporate earnings reports for the third quarter have continued to come in better than forecasts. With roughly 40% of companies reporting, about 80% have beaten earnings expectations and 64% have exceeded sales forecasts, both better than historical norms. With that said, earnings growth for the third quarter has actually come in at -3.7% thus far. As a result, there is a reasonable possibility that earnings growth will be negative for the third quarter.
Market Data
for the week ending 10/25/2019
If you have questions about the markets or would like to talk about your investments, please contact me at bfontana@invtrust.com or via phone at 704.940.3544.
Investors Trust Company helps its clients make sound financial decisions by providing strategic advice and asset management services with a high level of personalized attention. If we may help you or your clients with their investment management needs, please contact one of our Relationship Team members at trust@invtrust.com.
