TGIF! September 23, 2016

September always brings excitement to investors.  Generally it comes with a negative flavor.  You may recall, September is historically the worst month on the calendar for the Market.  So far, so good this year.  September brought some downward pressure early on, but those losses were erased this week.  In fact, this was the strongest week in 2 months.  The tech-heavy NASDAQ reached new highs on Thursday.  The DOW and S&P are just off there all-time highs.  It’s been a very volatile month.  We certainly prepared for that.  

Both stocks and bonds rallied this week.  It was a Fed induced rally.  The widely anticipated meeting for the U.S. central bank brought great relief.  Interest rates stayed in check, as widely expected, but the Fed did suggest a hike is coming in December.  Right now, the Market is pricing in just over a 50% chance of a rate hike in December.  We actually wanted them to raise rates at this meeting, just to get it out of the way.  Fed Chair Janet Yellen said in her press conference they were still looking for more evidence of sustainable economic progress.  Economic data has showed some slowing of late.  Both stocks and bonds loved the news though.  Rates are staying lower for longer.  Both Oil and Gold raced higher too while the Dollar slid.

Central banks continue to have great influence in the global markets by keeping interest rates low to outright negative and are providing tremendous liquidity in the system.   It’s not necessarily a healthy situation.  Revenue and earnings growth for Corporate America have been underwhelming.  But stocks continue to hold these record high levels.  This is perplexing so many people, considering all of the risks and uncertainties both here and abroad.  Has everyone forgot about Brexit?  Many issues are far from resolution.  There are times where you just can’t fight the tape.

With this Fed meeting now over, investors are turning their attention to Monday, the first Trump-Hillary debate.  It should prove to be quite eventful.  Expect the volatility to continue.  It’s September.  There’s a lot that’s going to happen between now and the December meeting.  We’re all over it.

Bedell Frazier Investment Counselling

It was a busy Summer for our traveling hat!  It reached nearly every corner of the globe.  Thanks for everyone that sent in pictures.  We will continue to circulate and publish the results.  Here are some fresh photos to see where it showed up as Summer came to a close.

Have a nice weekend.  We’ll be back, dark and early on Monday.


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