Highlights of this Update:

  1. Call today to reserve your spot(s) for our annual Client Event on October 6th!
  2. U.S. stock indices eke out small gains last week with increased volatility.
  3. FED meets this week Tuesday and Wednesday.
  4. We don’t see a U.S. recession in the near term based on indicators we follow closely.

READ ON FOR ADDITIONAL DETAILS…………………………………………………

F.I.G. Annual Client Event:

Be sure to call and make your reservations for this year’s F.I.G. Client Appreciation event on October 6th.  We have reserved the rooftop at Packard’s in midtown Oklahoma City.  We want this year to be an evening for all of you to see old friends and make new ones in a very relaxed atmosphere. Seating is limited and we are filling up fast so call today to secure your spots for a great evening!

The Markets:

Last week saw continued volatility for the major U.S. stock indices, but after all was said and done, market indices inched higher for the week.  The Dow Jones Industrial Average rose .21% for the week, and is now up 4.01% in 2016 as of last Friday’s close.  The Standard & Poor’s 500 stock index moved .53% higher, producing a gain of 4.66% year-to-date. (MarketWatch)

Oil dropped in the previous week, leaving the price for a barrel of West Texas Intermediate Crude oil at $43.19, compared with $37.07 at the start of this year. (CNBC) Interest rates inched higher with the yield for the 10 year U.S. Treasury at 1.70%, up .03 for the week. (U.S. Treasury) This compares to 2.27% at the end of 2015. The national average for a 30 year fixed rate mortgage is now 3.58%, and 2.67% for the 15 year fixed rate. (Bankrate.com)

Volatility Comes Back:

On Friday September 9, the Dow Jones Industrials fell by 394 points, only to rebound the following Monday by 240 points. That was followed by a loss of 259 points on Tuesday (St. Louis Federal Reserve).

One possible cause for the increased volatility can be traced to a slew of Federal Reserve officials that offered various thoughts on what the central bank should do with interest rates. With the Fed meeting scheduled for this week, markets were quickly shaken out of the complacency that had settled over trading in early July.  Recent action in the market is a good reminder that we will see fluctuations from time to time. It’s simply a normal part of investing.

Longer-term, shares take their cues from the fundamentals. Short-term, the flavor of the month, or for that matter, the flavor of the week can skew markets in either direction

This brings us to this week’s Federal Reserve meeting, which concludes on Wednesday and is followed by the quarterly press conference with Fed Chief Janet Yellen.

Odds are very low the Fed will hike its key rate, the fed funds rate, by ¼% from the current range of 0.25-0.50%. More importantly, how the Fed frames its outlook going forward will be of interest to investors.

On a related note, the Bank of Japan meets on Wednesday. And there has been increasing talk that it may cut interest rates and/or make other adjustments to policy (Reuters). But there is no solid consensus.

Current events here or overseas can influence our markets, either favorably or negatively, over the short term. But it is important to point out that longer term, the financial markets have historically taken their marching orders from the U.S economy.  The indicators we follow do not indicate a recession is coming in the near term, and we remain positive for stocks/equities at this time.  Also, we have moved our fixed income/bond funds to shorter term maturities to position these funds in anticipation of increasing interest rates ahead, albeit on a very gradual basis.

We appreciate the privilege to serve each of you and look forward to working together in the years to come.

God Bless,

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.