Hello everyone, Kramer Wealth Managers would like to take the opportunity to share some market insights about what happened in the past quarter. This focuses on 3rd quarter of this year.
U.S. Markets
Stocks took investors on a roller coaster ride in the third quarter, with an early summer rally coming to an abrupt end after the Fed pledged to continue fighting inflation.
The Dow Jones Industrial Average dropped 6.65 percent during the quarter. The Standard & Poor’s (S&P) 500 Index fell 5.28 percent, while the Nasdaq Composite lost 4.11 percent.
A July Rally
After a painful slide from the start of the new year, stocks staged a powerful rally off their mid-June lows.
The summer rally peaked in July as both the S&P 500 Index and the Nasdaq Composite posted strong gains.
The fears of economic weakening that plagued the stock market all year seemed to lessen, even though much of the economic data suggested little had changed.
For example, June inflation came in at 9.1 percent, and many investors anticipated a 100 basis point hike in the federal funds rate after July’s Federal Open Market Committee (FOMC) meeting.2
Powell’s August Speech
The upward momentum continued into the first half of August but ended abruptly as rate hike concerns reasserted themselves.
However, Fed Chair Jerome Powell’s hawkish speech at the Jackson Hole Economic Symposium sent stocks lower, returning the market to this year’s general malaise.
Economic Focus in September
Stocks saw a brief September upturn but lost momentum ahead of the September 20–21 FOMC meeting, in which the Fed announced its third consecutive 75-basis point hike of the year.3
Even though markets anticipated the change in interest rates, the Fed’s dim outlook surprised many investors, forcing them to confront the potentially unavoidable scenario of an economic hard landing.
What Investors May Be Talking About in October
In mid-October, China’s Communist Party will hold its five-year planning meeting, during which President Xi will most likely be elected to a third term and possibly “president for life.” This meeting will also craft China’s five-year economic framework and foreign policy.5
The most immediate concern is whether China will maintain its zero-COVID policy, a decision that has slowed economic growth, affected global supply chains, and disaffected its citizens.
Observers will be watching China for any policy statements concerning Taiwan. Even the hint of military action may add further geopolitical risk to the financial markets. So that’s something we will monitor and see how it goes to determine if it would impact the financial markets.
Now, the final thing we would like to share is this month, October, is a Health Literacy Month. We encourage you to have better communication with your medical professionals. Please make sure you write down all health-related information and questions so you can keep learning for your current and future health situation.
Hope you enjoy this video with some market insights to learn what is happening in the past quarter. We plan to share the quarterly market insights. We are looking forward to the next one.
If you have any questions to ask or want to discuss further, please go ahead and contact your financial advisor.
