Quarterly Market Review 3Q'19

Overview

The third quarter was full of ups and downs for stocks, much like the second quarter. Stock values moved in response to the rhetoric from the participants in the trade dispute between the United States and China. The Federal Reserve lowered interest rates two times during the quarter. More new jobs were added, but at a reduced rate, while wage growth continued. Manufacturing and industrial production remain muted, influenced, in part, by the waning global economy. Nevertheless, consumers were undaunted by economic developments, spending at a steady rate throughout the quarter.

Monthly Economic News

Total employment increased by 130,000 in August after adding 159,000 (revised) new jobs in July.

The Federal Open Market Committee followed July's 25-basis-point cut by lowering interest rates another 25 basis points in September. The federal funds rate range has been decreased by 50 basis points so far this year.

Economic growth slowed in the second quarter but was still solid. According to the third and final estimate of the gross domestic product, the second quarter grew at an annualized rate of 2.0%.

Inflationary pressures remain weak, as consumer prices showed no increase in August and are up 1.4% over the last 12 months.

Activity in the housing market can be described as erratic at best. Existing home sales jumped 1.3% in August after climbing 2.5% in July. Year-over-year, existing home sales are up 2.6%.

According to the Federal Reserve, industrial production rose 0.6% in August after falling 0.1% July.

Both import and export prices ebbed in August, falling 0.5% and 0.6%, respectively. For the year, import prices are down 2.0%, while export prices are off 1.4%.

British Prime Minister Boris Johnson attempted to shut down Parliament for several weeks as part of his effort to shunt opponents to his plan to push through a "no deal" Brexit by October 31. However, the UK Supreme Court ruled the move was unlawful.

While consumer confidence has been relatively strong for much of the year, it did fall back in August.

JMG Advisor Perspective

September 2019 Economic Commentary

The Inverted Yield Curve – What Is It and Why Are Investors Interested?

JMG Firm News

Team JMG braved the wet weather on Sunday, Sept. 22 to support Northwestern Medicine's "NM5K, Race to Impact 2019" in Lake Forest, Illinois. The annual event helps fund medical fitness and wellness programs for those who have conditions such as heart disease and Parkinson’s disease. Congratulations to JMG's Chuck Foster, principal/director of client development, for placing second in his division in the 5K run.

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