Denali Wealth Management

2019 Q3 Market Commentary

General Market Commentary as of September 30, 2019

The third quarter saw, for the first time in over a decade, the Federal Reserve cutting interest rates (not once but twice). Data suggests that later this month we are likely to see a third rate cut in as many meetings. With concerns over global economic weakening, trade tensions, and low inflation around the world, bond yields have continued to fall. Meanwhile, abroad, the European Central Bank (ECB) unveiled a stimulus package in hopes of reviving growth and inflation in the face of negative interest rates.

Despite the ongoing global trade fears and political rhetoric, the US equity market made modest strides in Q3. Some of the stronger returns were seen in the defensive equity and fixed income sectors, benefiting from lower interest rates. As we near the end of the year, year-to-date returns for all major asset categories remain in positive territory.

The current inverted yield curve could be interpreted as an ominous signal, yet the record low unemployment rate and the rise in payroll suggest otherwise. Regardless, predicting “if” a recession will occur, let alone “when”, would be a feat in and of itself. With all the noise circulating around this uncertainty it will likely only ramp-up over the next year. However, the market has shown to reward those who stay disciplined throughout the process.

Market Recap

Tot Return3-MO*12-MO*3-Year*5-Year*Closing Value
S&P 5001.19%2.15%11.14%8.58%2,976.74
Dow Jones Industrial Average1.19%1.73%13.71%9.57%26,916.83
NASDAQ Composite-0.09%-0.58%14.62%12.23%7,999.34

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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