Investment Commentary – September 24, 2019

Year to Date Market Indices as of Market Close September 24, 2019
• Dow 26,807 (14.92%)
• S&P 2,966 (18.34%)
• NASDAQ 7,993 (20.47%)
• Gold $1,539 (19.83%)
• Oil $57.03 (25.45%)
• Barclay Bond Aggregate (7.48%)
• All World Index (15.09%)
• Fed Funds Rate 2.00 (-0.25 rate cut 9/18/19)
• US Real GDP Growth 2.0 Q2/2019 (Down from 3.1 in Q1)

US stocks trade lower after Democrats turn up heat on Trump

U.S. stock futures are pointing to a lower open on Wednesday when trading begins after Democrats in the House of Representatives announced an impeachment probe of President Trump.

The announcement by Nancy Pelosi, speaker of the House, about an inquiry came after markets closed in New York. But news the Democrats were considering a probe broke earlier.

Dow Industrial futures are down 0.2 percent, S&P 500 futures are also off by 0.2 percent and Nasdaq futures fell 0.4 percent.

Stocks recovered somewhat in the Tuesday session after Trump said he plans to release the full transcript of a July phone call with Ukraine’s president that is at the center of the impeachment discussions.

The S&P 500 index fell 0.8 percent, The benchmark index remains within 2 percent of its all-time high set in late July.

The Dow slid 0.5 percent and the Nasdaq lost 1.5 percent.

Trump dampened optimism over prospects for a trade deal with China that might help resolve the tariffs war with Beijing in remarks before the U.N. General Assembly, where he underscored the need for a fair trade pact and threatened more tariffs.

Tensions had recently eased somewhat, prompting speculation that the next round of negotiations, in October, might at least yield an interim deal on trade.

Around the web

Fed reaction: Wednesday’s interest-rate announcement and news conference by Fed Chairman Jerome Powell triggered some of the only market volatility in what was a mostly quiet week. U.S. stock indexes initially tumbled after the Fed news, but gradually recovered once Powell spoke. Overall, the major indexes inched upward 0.1% for the day.

Divided Fed: As expected, the U.S. Federal Reserve cut its benchmark interest rate for the second time in two months, but board members were split on the outlook for further reductions this year. Seven of 17 Fed officials projected that there will be a need for another rate cut, but 10 others maintained that rates should remain at the newly reduced level or shouldn’t have been cut at all this month.

Yield watch: U.S. Treasury bond yields fell after rising sharply in the previous week, but they remained well above the multi-year lows recorded early this month. The 10-year Treasury bond yield fell to around 1.75% on Friday, down from 1.90% a week earlier.

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 investments.