Investment Commentary – September 16th, 2015
Market Indices as of Market Close September 16th, 2015
Dow 16,740 (-6.08 % YTD)
S&P 500 1,995 (-3.09% YTD)
NASDAQ 4,889 (3.23% YTD)
Global Dow 2,363 (52 week low 2,263/high 2,644)
10-year Treasury 2.30 (52 week low 1.64/high 2.66)
Gold $1,119 (52 week low $1,074/high $1,310)
Oil $47.17 (52 week low $37.75/high $90.76)
“Weekly Commentary Overview”
After weeks of struggling, global equities stabilized last week. Both stocks and bonds are benefiting from relative stability in overseas markets as well as some easing of China fears.
While investors caught a bit of a breather last week, volatility remains elevated.
We expect this pattern to continue given the persistence of several factors: a shift in the credit environment, a pending interest rate hike by the Federal Reserve (Fed) and expensive stock valuations.
And although the bumpy ride is expected to continue, creating challenges for investors, we also see opportunities.
“Fed begins two-day meeting to decide on interest rate hike”
Top officials at the U.S. Federal Reserve on Wednesday began a two-day policy meeting that is narrowly expected to end without an interest rate hike.
Policymakers are considering a rate increase to keep America’s strengthening economy from overheating, a decision that could potentially roil financial markets around the world.
The meeting began at 1 p.m. EDT, a Fed official said in an email. After Wednesday’s meeting, the central bankers are due to reconvene Thursday morning and announce their decision at 2 p.m. EDT.
Global banks and investment funds see the chances for a rate increase as essentially a toss up, although most experts see a slightly higher probability for standing pat.
In a Reuters poll of 80 economists, 45 said the Fed would keep its benchmark interest rate between 0 and 0.25 percent. Thirty-five expected a hike.
Among primary dealers, 12 banks expect the Fed to hold and the remaining 10 expect a hike.
Bets in financial markets, suggest investors see the chances of a hike at just one in five.
“This Day In History: William Durant creates General Motors”
On September 16, 1908, Buick Motor Company head William Crapo Durant spends $2,000 to incorporate General Motors in New Jersey. Durant, a high-school dropout, had made his fortune building horse-drawn carriages, and in fact he hated cars–he thought they were noisy, smelly, and dangerous. Nevertheless, the giant company he built would dominate the American auto industry for decades.
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.