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Economic & Market Outlook  

November 2015

  • The first estimate of the third-quarter showed continued expansion of the GDP, but at a much slower pace compared to the second quarter. Gross domestic product increased at an annual rate of 1.5% compared to the second quarter's growth rate of 3.9%.
  • At September's Federal Open Market Committee (FOMC) meeting, members voted to maintain the 0 to 1/4 percent target range for the federal funds rate. The FOMC noted interest rates will be increased when there is improvement in the labor market and when inflation moves closer to its 2% target rate.

  • Globally, developments in China during the past month eased concerns about the world's second-largest economy. In an effort to spur growth, the People's Bank of China cut short-term lending rates.

  • European markets rallied in October due to comments from European Central Bank President Mario Draghi hinting that he might extend a bond-purchase stimulus program in an effort to induce Europe's economic growth rate.

  • U.S. equity markets rallied significantly in October. U.S. stocks as measured by the S&P 500 jumped 8.3%. The tech-heavy NASDAQ closed up 9.38%.

  • Global stocks, as measured by the MSCI All Cap World Index-ex U.S. rose 7.4%. Emerging markets also bounced back, gaining 7.13% for the month of October.

  • Treasuries continued to provide a safe haven. The 10-year Treasury yield finished the month at 2.14%, slightly lower than the yield at the beginning of the year.

  • Although U.S. bond yields are extremely low, yields are still higher than can be found in other developed countries such as Germany and Japan.

  • With interest rates near historic lows, the upside for bond prices is limited. We continue to stay underweight direct interest rate risk, favoring high quality and liquid bonds in a more volatile rate environment.Recent data indicates China's economy continues its slowdown, causing turmoil in stock markets around the globe. The Chinese government responded by cutting interest rates and lowering bank reserve requirement ratios, allowing for more money to be available to borrow for investment.

WM-203P-1115   Source: FolioDynamix

  • This information has been compiled using data and other statements of fact derived from sources which we believe to be accurate and reliable. However, such data and other statements of fact have not been verified by us, and we do not make any representations as to their accuracy or completeness. Any opinion expressed herein reflects our judgment at this date and is subject to change.

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