(For the quarter ended September 30, 2014.)
The market’s climb continued for a seventh consecutive quarter over the summer months as major indexes flirted with new records before pulling back in late season volatility. Longer-term measures continue to show solid gains. The S&P 500, Dow Jones Industrials, and NASDAQ Composite remain well above their pre-financial crisis peaks from 2007. They are also some two-and-one-half to three times greater than their 2009-recession troughs. Corporate earnings reported during the summer tended to be better than analysts’ expectations. Argentina’s attempt to selectively default on some bonds roiled global bond markets but it was ultimately rejected by a court in New York. There was little change in the principal domestic bond yield benchmarks.
Source: Wealth Management Systems Inc. The S&P 500, Dow Jones Industrials, and NASDAQ Composite are unmanaged indexes. It is not possible to invest directly in an index. Past performance is no guarantee of future results. *Price only. Does not include dividends.
GDP Shined Brightly The economy appeared to gain more vigor as the summer progressed. Overall growth came in at an annualized rate of 4.2% when the numbers for the second quarter were fully tallied. Other indicators pointed to continued growth as private-sector strength offset continued government austerity. Overall inflation remains inconsequential.
Job Growth Concerns Remain There are signs that the modest pace of job growth shown so far this year may be slowing. Just 142,000 jobs were added in August, down from the average monthly gain of 212,000. The unemployment rate has been hovering just above 6% as new job growth balanced with growth in the number of job seekers.
Federal Reserve Interest Rate Policy Report The committee at the Federal Reserve that regulates interest rates said it continues to be committed to “exceptionally low” rates even though it has stopped actively trying to restrain long-term bond yields. The benchmark yield for the 10-year Treasury bond ended the quarter at 2.52%, virtually the same place it opened in July.
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