Weekly Market Commentary October 2, 2017

Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

U.S. markets reacted positively to the Trump administration tax proposal. For the week, the S&P 500 climbed 0.7% higher. The MSCI ACWI was basically unchanged. The Bloomberg BarCap U.S. Aggregate Bond Index slipped -0.1%.

The global economy continues to expand while politicians in countries such as the U.S. and Japan focus on revving up economic growth through tax reform or additional spending. In the U.S., the Federal Reserve continues to wrestle over whether or not to raise rates while inflation is below 2%.

Key Points for The Week

  • A speech by Fed Chair Janet Yellen and estimates for declining unemployment raised the odds of an interest rate hike in December.
  • President Trump’s tax plan provides a framework for rates, but expect adjustments in Congress.
  • Major global economies are all in expansion mode for the first time since 2007.
  • The S&P 500 has been up every month so far this year.

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.

Yellen says Fed should be ‘wary’ of raising rates ‘too gradually’

Earlier this week, Fed Chair Janet Yellen said increasing rates too gradually could lead to a lagged inflation problem down the road. Yellen’s comments show she is in the majority at the central bank, which favors one more rate hike before year-end. Markets have priced in a 70% chance for a December rate hike.

Trump, GOP to cut top rate to 35 percent

President Donald Trump and Republican leaders hope to drop the highest income tax rate to 35% and dramatically reduce the corporate tax rate from 35% to 20%. Part of their plan, unveiled last week, includes protections to prevent wealthier people from skewing their income to make them eligible to receive the small business rate, which Trump plans on lowering to 25% from 39.6%. Trump’s plan also includes doubling the standard deduction for most households. The tax reform plan will likely go through many adjustments as 45 of 48 Democratic U.S. Senators have stated they will not support a tax bill that adds to the deficit.

Abe calls snap election in Japan, readies $18 billion package

Japanese Prime Minister Shinzo Abe announced an $18 billion economic package last week. He revealed numerous economic measures in the package, including higher spending on education, which would be funded by an increased tax rate. This plan is much different from the previous one, which aimed to reduce the nation’s debt. Abe also called for a snap election, saying he is changing a pledge made to the public so must seek the will of the people.


Fun Story of the Week

High school student becomes second teen to join Kansas governor race

Getting into an elite college is a tough task. Two students in Kansas have taken a unique approach to standing out by hoping to add “Governor of Kansas” to their resumes. Tyler Ruzich, who will soon turn 17, has entered the race for governor, making him the second teenager to do so. The two teen candidates happen to be from different parties, so there’s a chance the final candidates could be two 17-year-olds. All jokes aside, Ruzich is ready to win.


 

 

 

 

Share:
facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.
Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

RECENT POSTS

Market Commentary: Robust Labor Market Growth Continues with Fed Poised for Another Rate Hike

Positive jobs data supported the market last week. The U.S. establishment survey indicated 372,000 new jobs were created in June. The rally was broad-based as every sector added jobs last month except for the governmental sector. Health care, professional and business services, and leisure …

Market Commentary: Moderating Inflation, Ebbing Political Uncertainty Among Reasons for Hope in the Face of a Tough Market

The Personal Consumption Expenditure (PCE) Price Index increased 0.6% in May, after rising only 0.2% in April. PCE inflation is an alternative inflation measure to the Consumer Price Index (CPI), which is released earlier. The two measures both show inflation to be very high, but the CPI in …

Market Commentary: S&P 500 Rallies 6.5%, Lifting Market Above Bear Level

The S&P 500 spent only a short time below the 20%-decline threshold, before jumping back above it last week. U.S. large-cap stocks rallied 6.5% based on optimism that inflationary pressures are starting to respond to higher interest rates.

Market Commentary: Fed Raises Rates by 0.75%, Market Moves Into Bear Territory

The S&P 500 dropped 5.7% last week and is now 22.3% off its peak. This decline pushed the index of large-cap U.S. stocks into a bear market, which is defined as a 20% or greater drop from its peak. Volatility remained elevated, and the S&P 500 has now moved by 1% or more 60 times …
1 2 3 4 69 70 71

Get in Touch

In just 15 minutes we can get to know your situation, then connect you with an advisor committed to helping you pursue true wealth.

Schedule a Consultation