Investment Commentary – September 30th, 2015
Dow 16,285 (-8.63 % YTD)
S&P 500 1,920 (-6.74% YTD)
NASDAQ 4,620 (0.35% YTD)
Global Dow 2,247 (52 week low 2,203/high 2,644)
10-year Treasury 2.05 (52 week low 1.64/high 2.52)
Gold $1,115 (52 week low $1,074/high $1,310)
Oil $45.48 (52 week low $38.51/high $87.14)
“U.S. economy expands more than expected”
On Friday, reports showed that the U.S. economy expanded at a 3.9% annual rate in the second quarter, which was more than previously estimated, boosted by gains in consumer spending and construction.
T. Rowe Price Chief U.S. Economist Alan Levenson said he expects final third-quarter demand to be strong. “Available evidence indicates that core demand (consumer spending, residential, and business fixed investment) sustained this steady growth pace through the third quarter, continuing the recovery from the first quarter’s subpar 2.0% advance in core demand,” Levenson said.
“Why You Should Stay the Course during Market Volatility”
Although volatility is an inevitable part of investing, markets may reward those who stick to a
From January 1, 1926, to December 31, 2014, the S&P 500 Index has produced positive returns in every rolling 15-calendar year period.
Your portfolio’s stock/bond allocation should reflect your investment time horizon and tolerance for risk—for most investors, stocks play a more prominent role with longer time-horizons. In general, the longer your horizon, the more prominent role stocks should play.
Diversifying your portfolio with a wide range of stocks and bonds can help you manage volatility and market uncertainty, although diversification is not a guarantee that you won’t lose money.
“Investors look past weak Chinese data”
Investors largely looked past news that manufacturing in China contracted at the fastest pace in more than six years. The recent data, which further underlined the weakness in the world’s second-largest economy, came out shortly after China’s President Xi Jinping tried to send reassuring signals during a U.S. visit about the health of the Chinese economy. In a policy speech at the start of his visit, Xi insisted the Chinese economy was operating within the “proper range” with a growth rate of 7%. He also defended Beijing’s August intervention in stock markets, as well as the decision to carry out a small devaluation of the Chinese currency and the move to a new exchange rate mechanism. T. Rowe Price sovereign analysts say they expect that China will likely experience a soft economic landing because the country’s policymakers have a number of tools at their disposal to manage the economy.
The views presented are not intended to be relied on as a forecast, research or investment advice and are the opinions of the sources cited and are subject to change based on subsequent developments. They are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy.