Monthly Economic Update: October 2019

 

Transcript:

Hey, everyone! This is Derek Merkler, the Military Financial Advisor, with my economic update for October 2019.

I’ll be discussing headlines from September and offer some perspective on those headlines.

Last month saw some jitters, but investors saw more upside than downside with the S&P 500 gaining 1.7 percent. The Dow Jones Industrial Average rose nearly 2 percent, the Nasdaq Composite less than 0.5 percent.[1]

U.S.-China trade talks are scheduled to resume on October 10. There is optimism, but also uncertainty. Little progress has been made toward a deal, and there are rumors that the U.S. is considering a limit on investment in Chinese companies.[2]

On September 15, the price of crude oil jumped nearly 15 percent. Attacks on major Saudi Arabian facilities took crude near $63 a barrel. And yet, oil had a down month, ending September below $55.[3],[4]

The Federal Reserve also adjusted short-term interest rates. Its quarter-point cut left the benchmark interest rate in a range of 1.75 percent to 2 percent. The vote was close, and Fed officials seemed divided about further cuts. Seven thought we would see another cut this year. Ten didn’t.[5]

The latest economic indicators were mixed but better than expected. Companies hired 130,000 net new workers in August, down from 159,000 in July. On the other hand, retail sales and personal incomes were up 0.4 percent. The Conference Board’s Consumer Confidence Index fell, and the Institute for Supply Management’s manufacturing index showed factory activity slowing.[6]

So, while we saw some major negative headlines, many were underpinned by positive developments. As such, U.S. stock markets were little changed for the month. Perhaps there is some rationality there after all!  Every once in a while at least.  With the end of the quarter behind us, we’ll look to corporate earnings reports over the next 45 days to have the greatest impact on markets if there are any surprises.

That’s it for this month.  If you have any questions or want to discuss these topics in greater detail, send me a message!

 

Credits:

Thanks for watching!

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MilitaryFA.PXAdvisor.com 

Remember, the topics discussed in this video are for informational purposes only and that past results do not guarantee future performance.  If you would like to discuss your financial situation, please email me at Derek.Merkler@Parsonex.com.

Advisory services offered through Parsonex Advisory Services, Inc., 8310 S.Valley Hwy, Suite 110, Englewood, CO 80112. 303-662-8700.

[1]https://www.bloomberg.com/markets/stocks

[2]https://www.cnbc.com/2019/09/30/us-stocks-investors-monitor-us-china-trade-impeachment-inquiry.html

[3]https://www.marketwatch.com/story/us-oils-10-surge-after-saudi-attack-puts-it-on-track-for-the-biggest-daily-gain-in-312-years-2019-09-15

[4]https://money.cnn.com/data/commodities/

[5]https://www.reuters.com/article/us-usa-fed/fed-cuts-rates-on-7-3-vote-gives-mixed-signals-on-next-move-idUSKBN1W32H7

[6]https://www.investing.com/economic-calendar/

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