General Market Commentary as of September 30, 2017
It’s been a good quarter for global equity markets, with the economic data continuing to point to a healthy global economy. In the US, job vacancies hit the highest level since 2000. In Japan, there are now more jobs available per applicant than at any point since 1974. In the UK, the unemployment rate is the lowest since 1975 and Eurozone consumer confidence is at its highest since 2001.
Quantitative Tightening
Against this positive economic backdrop, central bankers have continued to indicate that they want to gradually reduce the level of monetary policy stimulus in place. The US Federal Reserve (the Fed) announced that it will start the process of “quantitative tightening”. This reduction in the size of its balance sheet will begin to reverse some of the quantitative easing (QE) that has been so supportive of bond prices in recent years. The Fed also continues to suggest that another rate rise is in the cards for December. Meanwhile, the European Central Bank (ECB) looks set to announce a further slowdown in the pace of its own QE program and, not to be left out, even the Bank of England (BoE) has strongly suggested that it will raise interest rates before the year is out.
We seem to be set up nicely for a solid finish to 2017. The Fed’s plan for interest rates could be the biggest potential disruption for the markets in the fourth quarter barring some unforeseeable disruption.
Tot Return | 3-MO* | 12-MO* | 3-Year* | 5-Year* | Closing Value |
---|---|---|---|---|---|
S&P 500 | 3.96% | 16.19% | 8.50% | 11.83% | 2,519.36 |
Dow Jones Industrial Average | 4.94% | 22.38% | 9.55% | 10.77% | 22,405.09 |
NASDAQ Composite | 5.79% | 22.29% | 13.07% | 15.83% | 6,495.96 |
Source: Morningstar. The S&P 500, Dow Jones Industrial Average, and NASDAQ Composite are unmanaged indexes. It is not possible to invest in an index. Past performance is no guarantee of future results. * Price only. Does not include dividends.
All overviews and commentary are intended to be general in nature and for current interest, educational purposes and factual reference only and are subject to change based on market and other conditions.