What is usually a quieter summer period was rudely interrupted by more geo-political drama and extreme weather events. The terrorist attacks in Spain and uptick in US-North Korean tensions resulted in increased market volatility. Hurricane Harvey’s 6-day rampage over Texas and Louisiana set a record for rainfall (an estimated 27 trillion gallons) and tallied a loss of $75 billion. Soon after, Hurricane Irma blew across the Southeast racking up an estimated $50 billion+ in damages. Nevertheless, overall good news in economic data from Europe, UK, Japan, and Brazil helped markets continue to creep up.
At the time of this publication, US Stocks are rallying to all-time highs. The S&P 500 Index (large US companies) is up 14.24% YTD while international holdings are up 19.17% according to the MSCI World ex-USA index.
The FED continues to be in the spotlight as onlookers wait to see their reaction to inflation, unemployment and growth. Inflation seemed to be in a multi-month slump from February to July, but August CPI numbers showed a welcomed increase of 0.4%. Unemployment ticked up slightly from 4.3% in July to 4.4% in August, but is down over half a percent from last year’s numbers. Strong growth is important now and we’ll be keeping an eye on this between now and the end of the year.
President Trump continues to work through his agenda. Tax cuts, which are still on the table, could be a powerful stimulant for the economy. Regardless of which party brought it about, cuts in the capital gains rate has historically had a positive impact on the stock market.
During uncertain times like these, it’s always important to have a disciplined investment process. Although we can’t predict what will happen in the future of the market, we work constantly to keep you properly diversified according to your goals, time horizon, and risk tolerance. If you’ve had any changes in your financial life, allow us to update your plan to help keep you on track. Have a great Fall and enjoy the weather before the snow starts falling!
