Denali Wealth Management

2018 Q3 Market Commentary

General Market Commentary as of September 30, 2018

Global economic growth continues at a steady pace. US GDP came in at a 4.2% annualized rate for the 2nd quarter (reported in the 3rd quarter). The economy is in its 9th year of economic expansion, the 3rd longest on record. The Federal Reserve, in September, raised the federal funds rate target by 25 basis points in light of this growth. Market expectations are for one additional increase in 2018 making it four for the year.

Global equities continued their recovery in the 3rd quarter while US equities advanced to record territory. After underperforming last quarter, large-cap stocks outperformed their small-cap counterparts for the 3rd quarter. Growth continued to outperform value across the capitalization spectrum for the 3rd quarter of 2018 on the heels of outperforming across all capitalization sizes by historical margins in 2017.

US interest rates continue to slowly rise while remaining at historical lows. Interest rates rose for short term US Treasury securities in the 3rd quarter in concert with the Fed’s interest rate hikes in June and September. The yield on the 10-year treasury also rose, but by a smaller amount than short-term yields, which reinforced the markets concerns over a flatten yield curve.

Market Recap

Tot Return3-MO*12-MO*3-Year*5-Year*Closing Value
S&P 5007.20%15.66%14.92%11.62%2,913.98
Dow Jones Industrial Average9.01%18.09%17.56%11.83%26,458.31
NASDAQ Composite7.14%23.87%20.31%16.36%8,046.35

Source: Morningstar. The S&P 500, Dow Jones Industrial Average, and NASDAQ Composite are unmanaged indexes. It is not possible to invest in an index. Past performance is no guarantee of future results. * Price only. Does not include dividends.

All overviews and commentary are intended to be general in nature and for current interest, educational purposes and factual reference only and are subject to change based on market and other conditions.

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