Highlights of this Week’s Update:
- Seats still available at upcoming Social Security Workshops. Call today to reserve your seat(s)!
- Stocks continue to rally marking the 4th straight week of gains.
- Oil and gold drop, interest rates rise.
- International events-talk of more stimulus in Europe and rate cut in China-help fuel stocks.
- Corporate earnings are overall beating low expectations with hopes of stronger growth next year.
READ ON FOR FURTHER DETAILS……………………………………………………..
Social Security Workshops-
There are still seats available at the following scheduled Social Security Workshops:
Wednesday, October 28th: 10:00 – 11:00AM
Thursday, October 29th: 1:00 – 2:00PM
Friday, November 6th: 11:00AM – 12:00 Noon
If you or someone you know is approaching the decision as to when and how to apply, as well as what options are available, this workshop will provide valuable information to help make a decision that can affect your lifetime income. Call us today to make your reservation(s): 405-844-9826.
October has a negative reputation thanks in large part to the Crash of 1929 and 1987, and 2008’s implosion. In reality, data over the last 55 years highlight that September has been the worst month for stocks (St. Louis Federal Reserve S&P 500 returns), while October has been positive. With one week to go, October has been a recovery month for investors. Last week the Dow Jones Industrial Average gained 2.50%, bringing its 2015 year-to-date return to -.99%. The Standard & Poor’s 500 stock index rose 2.07% for the five trading sessions ending Friday. (MarketWatch)
Oil prices fell to $44.73 for a barrel of West Texas Intermediate Crude, and gold dropped $19.60 an ounce to end the week at $1,161.25. (CNBC) Interest rates rose, with the yield for the 10 year U.S. Treasury rising .05 to finish last week at 2.09%. (U.S. Treasury)
Last week’s strong finish for stocks extended the winning streak to four weeks, the longest since last October’s recovery from an Ebola scare (MarketWatch data). Since the end of September, the S&P 500 is up an impressive 8.1% through October 23rd.
Since the low point on August 25 of 1,867.61 (closing low-St. Louis Federal Reserve), the S&P 500 Index has rallied 11.1% to 2,075.15 as of October 23. That puts the broad-based measure of large company stocks just 2.6% below the May 21 closing high for 2015 of 2,130.82.
We’ve maintained that the August/September selloff this year has “felt” more like the 1997 Asian currency crisis, 2011, or 1998’s Russian default and Long Term Capital Management debacle, rather than 2008, because overseas’ troubles led to the 2015 stock market correction.
As Figure 1 highlights, stocks took a sharp tumble in 1998, including a 12.4% decline in just four days, which compares to a nearly 12% selloff over 6 days in August.
While troubles overseas haven’t gone away, investors don’t believe a U.S. recession is imminent, and expectations of a 2015 rate hike have receded, both of which has been a tailwind for stocks.
International Moves Help Fuel U.S. Stocks:
Last Thursday’s strong gain was fueled by European Central Bank (ECB) talk that more monetary stimulus might be on the way (Wall Street Journal, ECB), which was followed up by Friday’s announcement of rate cuts by China’s central bank (Wall Street Journal). Expectations of more stimulus from global central banks, coupled with growth at home, are typically a recipe for a U.S. rally.
Meanwhile, U.S. firms are once again beating low expectations on the earnings front (Thomson Reuters). While Thomson Reuters continues to project that profits will dip slightly in the third quarter versus one year ago, the general trend suggests that earnings will begin to rise again for S&P 500 firms in either the fourth quarter or by early 2016. While there are always risks as we head into the end of the year, super easy monetary policies + modest U.S. economic growth + expectations U.S. corporate profits should begin to rise = a recovery in U.S. stocks.
We hope you have a great week ahead and don’t forget to turn your clocks back an hour on Saturday evening. If you ever have any questions or concerns, please don’t hesitate to call. Also, please keep the victims and their families in your thoughts and prayers from the tragedy at the Oklahoma State University homecoming parade this past Saturday.
Your TEAM at F.I.G. Financial Advisory Services, Inc.
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1 The Dow Jones Industrials Average is an unmanaged index of 30 major companies which cannot be invested into directly. Past performance does not guarantee future results..
3 The S&P 500 Index is an unmanaged index of 500 larger companies which cannot be invested into directly. Past performance does not guarantee future results.
5 New York Mercantile Exchange front-month contract; Prices can and do vary; past performance does not guarantee future results.
6 London Bullion Market Association; gold fixing pricing at 3 p.m. London time; Prices can and do vary; past performance does not guarantee future results.