Equity markets around the world are doing great after a healthy third quarter of the year. The stock market hasn’t seemed to care about the persistent threat of North Korea, or the limited policy advancements from the current administration.
Instead, labor markets continue to tighten, wage growth is apparent, and consumer and business confidence remains high. Companies around the US are growing both top and bottom lines. Interest rates are incredibly low, across the board, and commodity prices, though rising, remain depressed.
For those who are wary of international markets, take a look at the returns of five major indexes from 3rd quarter:
MSCI EM (Emerging Markets): +27.78%
MSCI EAFE (Europe): +19.96%
Russell 2000: +10.94%
S&P 500: +14.24%
BarCap US Agg Bond: +3.14%
Clearly, Emerging Markets is making a move. As evident in last quarter’s markets, smart investing requires a globally diversified approach. In the long term, this method gives much greater overall results.
Another trend that began in the 2nd quarter and continued into the 3rd was a shift toward value-oriented stocks. Financials, in particular, climbed almost 5% over the quarter. We expect Financials to continue to move in lockstep with the 10 Year Treasury. We also anticipate interest rates to end on a high note this year than where they began.
Overall, our firm believes we’ll see the markets continue to do well through the holiday season and end on a great note in December.
From all of us, to you, thank you for your continued confidence, and warm wishes for a great holiday season.