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Key Takeaways Third Quarter 2019
By Ralph Goldsticker, CFA | 23 October 2019
 

Despite bouts of volatility along the way, the broad US stock market eked out a small gain during the quarter, extending the longest bull market on record.

  • Stock markets remained volatile due to ongoing concerns about slowing growth, trade conflicts, and geopolitical tensions, including Brexit.

  • Even with slow growth overseas, and mixed signals at home, the broad US stock market continued to climb, and the Russell 3000 Index is up 20% year-to-date.  

  • Large cap stocks drove US market strength. US small cap, international developed, and emerging markets all fell during the quarter.

  • While US interest rates are low, they are higher than most of the rest of the world, encouraging flows into US markets.

 

We expect low but positive returns from bonds.

  • With economic data indicating slow growth, the Fed cut rates in July and again in September.

  • If growth remains weak and inflation low, it is likely that there will be at least one more cut before year-end.

  • Labor conditions remain strong, and consumers are spending.

  • Despite low interest rates, businesses are not borrowing and spending, and corporate earnings have been disappointing.