As you work to build a financial future for yourself and the ones you love, it is beneficial to have a perspective on the world around you and the outside factors that may impact how your wealth can grow and thrive in a global economy.
October was yet another interesting month for the U.S. Unemployment remained the same at 4.1%, in line with September’s 4.1% (still good for workers, better than it was for businesses looking for help, and near historical lows). Inflation (CPI) ticked down year over year to % in October versus the prior month of 2.4% (slower rate of increase means we are moving back to normal, who would have thought) and moving even closer to the Fed’s target of 2%. The Fed lowered rates again by .25% and, we could see rates drop by as much as 2% by this time next year. On the GDP (gross domestic product) front the U.S. closed the quarter jumping to 29.3 trillion https://fred.stlouisfed.org/series/GDP (maybe to some a 300 billion dollar move in one quarter is not a jump, but not too shabby).
On the international front, thoughts of recession have changed to slow growth. The Eurozone saw the Markit PMI Composite SA (Final) for October ticked up to 50 (positive movement is good), Retail Sales CA for September year over year were up 2.9% (up nearly 20% from the prior period, looks like the purse string may be loosening a little), and GDP SA year of year was flat for the 3rd quarter at .9% increase (flat is not down). In Asia Pacific economies: Japan’s PMI Services stumbled to 49.7 (not a great move from the previous month), GDP (Second Preliminary) year over year at .3% for the 3rd quarter (what an improvement from the previous quarter of -1.1%), and Retail Sales NSA year of year was up as well to .69% for September (the third largest economy in the world is starting to pick up steam). China’s CPI (inflation) came it at .3% year over year for October (don’t worry ours is slowing too) and Retail Sales NSA year over year for October came in 4.8% (everyone loves a positive number). Australia’s NAB Business Confidence for October came in at 5.0 rocketing from -2.0 (now that’s progress). As a result of U.S. companies deriving 40% +/- of earnings from outside this country and the current strength of the U.S. economy, I still feel investment in stocks will continue to favor the U.S. in the coming months with most markets outside the U.S. continuing to play catch up.
The market (measured by the S&P 500 ETF, SPY) was off a little at -.89% +/- in October, shaving off a little of September’s 1.79% +/-, on pace for a great year, and up 19.64% +/- for the year. I expect markets over the next couple of months to fluctuate in the 2-5% range, mostly sideways to down, as the earning season finishes up. At AWMS, we still own equities/stocks for the same reasons we always have for their long-term growth and consistent dividend cash flow. Although markets can be volatile at times, dividend and interest payments continue to pour in like Vernal Falls.
Please continue to make healthy decisions like washing your hands, getting plenty of sleep, eating balanced meals, staying hydrated, and taking a stroll if you feel like it. Reach out to a friend or loved one and have a great conversation.
Until next time, be well and keep putting one foot in front of the other. If you are not a client and would like to receive our newsletter or our monthly blog update, please use the contact tab on our website and drop us an email.
Sincerely,
Thaddeus Phelps, CEO/CIO
This commentary on this website reflects the personal opinions, viewpoints, and analyses of an Advance Wealth Management Service, LLC employee, and should not be regarded as a description of advisory services provided by Advance Wealth Management Service, LLC or performance returns of any Advance Wealth Management Service, LLC client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data, or any recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Advance Wealth Management Service, LLC manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.