Stocks moved higher again this week. The S&P 500 rose 0.9% last week and is now up 1.1% for the month. The MSCI ACWI rose 0.6% as global stocks slightly lagged the U.S. stock market. The Bloomberg BarCap Aggregate Bond Index climbed 0.3%.
As expected, the Fed raised interest rates one more time before year-end. Jerome Powell is set to take over in February, but current Fed Chair Janet Yellen expects Powell to take a similar approach. Internet services providers are no longer regulated by net neutrality rules, and we expect differentiated product offerings going forward. Faced with substantial shifts in the media industry, 21st Century Fox is selling a majority of its stakes to Disney.
Key points for the week
- The U.S. central bank raised rates for the third and final time this year.
- A vote to end net neutrality passed on Thursday.
- Disney has purchased a majority of 21st Century Fox in a move sure to reshape an evolving media industry.
What are we reading?
Below are some areas of the market we paid particularly close attention to this week. For further information, we encourage our readers to follow the links.
The U.S. central bank raised interest rates for the third and final time during its meeting Wednesday. The key lending rate has increased to 1.25 – 1.5 percent. During Yellen’s final press conference, she indicated the Fed would not be more aggressive next year, for now. The expectations are for three more rate hikes in 2018.
The Federal Communications Commission voted to end net neutrality on Thursday. This vote ended the stout regulation on telecommunication services companies that required them to provide guaranteed equal treatment of internet websites and services. The outlook is mixed on how this will affect internet service. Some companies have come out stating they will uphold net neutrality, while others expect internet service providers to offer product styles similar to cable companies with certain packages. This would give large internet companies a competitive advantage as they will be able to afford the fees.
We continue to monitor and observe large player changes in the media industry. Walt Disney recently agreed to purchase a large portion of 21st Century Fox’s business for $52.4 billion. Disney would acquire Fox’s film and television studios, and the remaining Fox business will focus on news and live sports. The growth of online advertising and competitors that offer streaming services pushed Fox in the direction of making a deal.
Fun story of the week
When you accidentally shoot someone with a Taser, just saying sorry is not enough. Trooper Mitchell Goldman, an Oregon state patrolman, responded earlier this month to a domestic violence call, which ended up getting physical. Terry Rowan, a county deputy who also arrived on the scene, tased the uncooperative suspect. The only problem was one prong hit the suspect and the other hit Goldman. Later that week, Rowan sent Goldman a cake that simply said, “Sorry you got tased.”
This newsletter was written and produced by CWM, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The views stated in this letter are not necessarily the opinion of CWM, LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.
S&P 500 INDEX
The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
MSCI ACWI INDEX
The MSCI ACWI captures large- and mid-cap representation across 23 developed markets (DM) and 23 emerging markets (EM) countries*. With 2,480 constituents, the index covers approximately 85% of the global investable equity opportunity set.
Bloomberg U.S. Aggregate Bond Index
The Bloomberg U.S. Aggregate Bond Index is an index of the U.S. investment-grade fixed-rate bond market, including both government and corporate bonds.