The S&P 500 lost 6.9 percent in October, its biggest one-month slide since September 2011, when it fell 7.2 percent.
Concerns ranging from peak earnings growth, the U.S.-China trade war and rising interest rates drove the markets lower.
We expect that the equity markets could be volatile for the remainder of the year, as pending trade tariffs are adding uncertainty to the economic outlook.
It’s a tricky moment for the U.S. economy. Unemployment is at its lowest in decades and economic growth is strong, which could lead to higher inflation and interest rates.
Recent strong economic numbers have pushed the 10-year Treasury yield to a seven year high, slowing equity market momentum.
International developed equities fell 8 percent in October. Emerging Markets were down nearly 9 percent. A stronger U.S. dollar, slowing global growth and worries over tariffs pressured emerging market equities.
The Fed raised interest rates 25 basis points in the September meeting, and signaled one more increase this year. The term “accommodative” was removed from their statement.
The bond market is losing confidence in the Federal Reserve’s policy tightening projections after a punishing stretch for U.S. stocks. - Markets are now factoring in fewer than two quarter-point hikes for next year, compared with the three increases that policy makers project
International equities look attractive over the long-term based on improving economic growth and attractive valuations.
- This information has been compiled using data and other statements of fact derived from sources which we believe to be accurate and reliable. However, such data and other statements of fact have not been verified by us, and we do not make any representations as to their accuracy or completeness. Any opinion expressed herein reflects our judgment at this date and is subject to change.