Prior to the coronavirus-induced market downturn, equity strategies emphasizing growth and momentum stood out as the leading risk factors. This trend has persisted throughout the market’s recovery since its low on March 23. While all equity factors have seen an upswing, growth and momentum have surged even more, as observed in various exchange-traded funds through the market’s close yesterday (September 17).
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Congress is currently working on legislation to prevent a government shutdown: WSJ
A judge has halted ‘politically motivated’ changes to the US Postal Service: Reuters
China reacts to a US envoy’s visit to Taiwan by conducting military drills: BBC
US economic confidence has improved but remains significantly lower than pre-pandemic levels: Gallup
US housing starts declined in August—marking the first monthly decrease since April: NMN
Philly Fed Manufacturing Index indicates continued expansion in September, albeit at a slower pace: MW
Weekly US jobless claims have dropped more than anticipated, reaching a new low during the pandemic: CNBC
Yesterday, the Federal Reserve announced its decision to maintain interest rates close to zero for an extended period until full employment and moderate inflation above the 2% target are achieved. Based on the recent economic projections released by the Fed, it appears rates will remain unchanged for several years.
Hurricane Sally has left over 550,000 people without power along the US Gulf Coast: BBC
The Federal Reserve anticipates keeping rates near zero for years: CNBC
CDC Director states that a coronavirus vaccine may not be available until mid-2021: WSJ
Are the weekly jobless claims figures trustworthy? NYT
Snowflake’s stock has more than doubled, marking the largest software IPO in history: CNBC
Homebuilder sentiment has risen to a record high in September: CNBC
US retail spending has continued to increase in August: NYT
Lower For Longer: The Federal Reserve has made it clear that it has no intentions of raising interest rates in the near future. Emphasizing that inflation is still “persistently below” the 2% target and that the labor market is far from full employment, the central bank announced it “expects to maintain an accommodative stance of monetary policy until these goals are fulfilled.”
Following the US stock market’s low on March 23, the ensuing rally has been rapid yet uneven. A select few sectors have outperformed the general market, according to a review of various ETFs by the market’s close yesterday (September 15). However, many sectors are still trailing behind.
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Hurricane Sally continues to pose a threat to states along the Gulf Coast: CNN
Israel has signed an agreement with two Gulf Arab nations at the White House: AP
Retail sales growth in the US is expected to slow according to today’s August report: WSJ
Fed economic forecasts are expected to improve during today’s policy meeting: Reuters
The OECD anticipates an “unprecedented” decline in global GDP for 2020: CNBC
UK inflation has fallen to a five-year low: CNN
US import-price inflation rose more than expected in August: CNBC
The NY Fed Manufacturing Index indicates growth has accelerated in the bank’s region in September: MW
US industrial output growth has continued to decrease in August: Reuters
When a central bank formally changes its policy to increase inflation, it’s expected that the government bond market would react. However, so far, there have been few indications that US Treasuries are responding to last month’s implementation of the Fed’s average inflation targeting (AIT) policy, which aims to “moderately overshoot” the 2% target for an extended period, as clarified by Fed Chair Jerome Powell last month.
Hurricane Sally has begun to impact the Gulf Coast: Reuters
Historic diplomatic agreements between Arab nations and Israel are set for a signing ceremony today: AP
There has been no relief in sight for the wildfires devastating the US West: AP
Minimal guidance is expected from the Fed regarding its new policy for setting rates: BBG
The Gates report indicates that 25 years of global progress in health and economics have been reversed this year: Politico
Researchers have found no evidence of a small-cap risk premium: II
China’s consumer and industrial data suggest that the recovery continued in August: CNBC
German investor sentiment has increased in September, surpassing expectations: Reuters
Consumer inflation expectations have ticked up to 3.0% for a one-year horizon: NYF
According to Morgan Stanley, without stimulus, the US economy’s full recovery could extend an additional six months: BBG
Real Treasury yields have remained negative for over five months:
Last week, investors struggled to find a cohesive narrative in global markets, with performances varying significantly among major asset classes based on a range of ETFs. While equities in developed markets excluding the US showed slight gains, US stocks faced notable declines during the week ending September 11.
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In summary, the current financial landscape has witnessed a mix of factors influencing market performance, from the Federal Reserve’s policies to the impacts of natural disasters and geopolitical events. Moving forward, investors must remain vigilant and adaptable as they navigate these evolving circumstances for optimal investment strategies.
