Market Commentary

financial market commentary

The rise in credit spreads indicates that markets have been concerned with repricing risky debt since early 2015, and these concerns have spilled over into the prices of all risky assets, including stocks. To answer this question, let’s examine Figure 2, which takes a closer look at long-term growth in key fundamentals such as consumer spending, personal income, retail sales and wages and salaries.

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If all these lofty ideas were worth the time and expense it took to develop and promote them, the average citizen would have more optimistic, patriotic feelings about trading platform our country than is currently the case. Reagan wanted to shrink government — the image of the Pentagon paying $500 for toilet seats was extraordinarily effective.

financial market commentary

This can be illustrated by comparing the performance of the Dow Jones and NASDAQ for the month of November. The NASDAQ has gained 8.4% so far in November while the Dow Jones is up 11.2%. And last week saw the Dow rise by 1,156 points while the NASDAQ fell 66 points.

That result is yet to be determined because the candidates for Senate in Georgia will compete in a runoff election on Jan. 5. State law in Georgia stipulates that a candidate must receive more than 50% of the vote in the state to take office and no candidate achieved that mark on Nov. 3. Special risks are inherent to international investing, including those related to currency fluctuations and foreign political and economic events. Market indexes are unmanaged and cannot be invested into directly and are not meant to depict an actual investment. The Weekly Market Update is published every Friday, after market close.

Economic Data Continues To Exceed Tempered Expectations

When describing trends in corporate and consumer debt in Figure 3, I had referred to the slight deleveraging by business as “apparent” – now I’ll explain further. All of the debt in existence today doesn’t show up on the chart, because over $4 trillion of public and private debt now resides on our own Federal Reserve Bank’s balance sheet, conveniently out of sight – at least for awhile. Most readers have probably heard the term “QE,” short for “quantitative easing,” thrown around in the last few years. In addition to its obsession with low interest rates, the Fed has used its powers to buy up a substantial amount of the excessive debt in financial markets. Notice how the Fed begins implementing this highly unconventional support for markets in late 2008, and how stock prices begin responding in March 2009.

The global economy has been experiencing widespread declines in the prices of both agricultural and physical commodities for several years. These trends are not consistent with global growth and prosperity. Every central bank in the world is easing its monetary policy except the U.S. The Bank of China has recently announced new monetary stimulus efforts on consecutive days. The Bank of Japan openly admits it has extended quantitative easing to include the outright purchases of equity securities . The European Central Bank also laid out plans for another massive round of quantitative easing recently (although Mario Draghi is fast becoming known as the boy who cried “QE”).

What History Says About Elections And The Stock Market

JP Morgan is completing a $1 billion buyout of its joint-venture asset-management partner and is also taking control of its Chinese securities and futures joint ventures. These actions should make JP Morgan the first major fully foreign-owned investment bank operating in China. Goldman Sachs and Morgan Stanley have taken majority control of their Chinese securities ventures, and Citi has been authorized to serve institutional investors as the first US custody bank in China. A concise weekly summary of the major economic events around the world and their impacts on the financial markets. Gifford notes that about USD 16 billion of outflows took place following the first withdrawal bill, which permitted affiliates to take out up to 10% of their savings accounts managed by private pension funds. This second bill is similar, and he estimates that another USD 12 billion to USD14 billion could leave the pension system.

The Charles Schwab Corporation provides a full range of brokerage, banking and financial advisory services through its operating subsidiaries. Its banking subsidiary, Charles Schwab Bank , provides deposit and lending services and products. Access to Electronic Services may be limited or unavailable during periods of peak demand, market volatility, systems upgrade, maintenance, or for other reasons. A one-year history of Bloomberg’s commodities index confirms the trend.

  • Under President Xi Jinping, China is pressing forward with a “linking” strategy to develop increased connections with foreign financial companies.
  • China wishes to attract increased capital inflows and to develop their bond, pensions, and insurance markets.
  • As the government pension plan accounts for just 3% of America’s pension assets, the effect on the flow of US investments into China’s equity markets is insignificant.

The analysis method is to individually rank each Conference Board indicator -1, 0, or +1 and to average these rankings two ways. The first way treats each indicator equally, while the second uses the weighting system employed by the CB. The possible range of scores is from -100%, which would represent a severe recession, to +100%, which would represent robust expansion.

He believed investors should purchase shares when a stock is trading below the underlying worth of the business. Value investing is all about looking for bargains, for diamonds in the rough. In November, consumer sentiment has declined by 5.9 percent month-to-month and it was off by more than 20 percent year-to-year. Sentiment is an important measure because consumer spending is a major driver of U.S. economic growth. This general communication, which is not impartial, is for informational and educational purposes only, not a recommendation. Information does not address financial objectives, situation or specific needs of individual investors. A comprehensive assessment of noteworthy trends shaping the global investment risk environment and our portfolio allocations.

PIMCO Investments LLC (“PIMCO Investments”) is a broker-dealer registered with the SEC and member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). PIMCO and PIMCO Investments is solely responsible for its content. PIMCO Investments is the distributor of PIMCO investment products, and any PIMCO Content relating to those investment products is the sole responsibility of PIMCO Investments. Group CIO Dan Ivascyn explains why assets near the center of quality and liquidity may offer value today, and have better potential to recover should the economy falter. None of the information on this page is directed at any investor or category of investors.

The S&P gained 2.21 percent to finish at 3,585.15, and the NASDAQ dropped 0.53 percent to end the week at 11,829.29. Moody’s notes that Mexico Beach benefits from Bay County’s relatively desirable and affordable location on the Florida Gulf Coast and has attracted new residents and investors. The population increased approximately 44% from the point of the most recent census in 2010 until just before the hurricane, reaching nearly 1,500 people.

Our Broader Economic View As Virus Fear Pushes Markets Into A Correction

For the week the Dow Jones rose 1,156 points (4.1%) 29,480; the NASDAQ fell 66 points (-0.6%) to 11,829; and the S&P 500 advanced 76 points (2.2%) to 3,585. Growing signs that the pandemic will worsen before it gets better has dampened some enthusiasm.

The movement in 10-year German bond prices was especially pronounced. Yields subsequently moderated on rising coronavirus cases, ongoing lockdown measures, and the European Central Bank’s (ECB’s) dovish comments. Peripheral eurozone bond yields largely tracked their peers in the core European economies. Call us today to meet with a member of our financial planning team and plan for tomorrow with confidence.

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