Market Beat: Third quarter in review
Stocks continued with their yearly gains in the third quarter, but at a slower pace.
At the end of the third quarter on Sept. 30, the S&P 500 was up 18.74% year to date and had a modest gain of 1.19% in the third quarter. The Dow Jones Industrial Average had a YTD gain of 15.39% and was also up 1.19% for the third quarter. The NASDAQ has posted a year to date gain of 22.42% and rose 1.02% in the third quarter.
Foreign markets pulled back a little bit in the third quarter but are still in positive territory on a year to date basis. The EAFE, which stands for Europe, Asia and the Far East is up 9.85% YTD, but fell -1.71% in the third quarter. The MSCI Emerging Markets Index is up a modest 3.66% year to date even though it dropped by -5.11% in the third quarter.
It has been a good year for bonds, interest rates have been falling and the yield curve is very flat and has inverted several times. The long-term U.S. Treasury bond fund, the TLT has risen almost in-line with the equity markets. TLT has posted a year to date gain of 19.70% and obtained 8.35% of that gain in the third quarter.
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Precious metals have also performed well so far this year. The gold ETF, GLD has posted a year to date gain of 14.53% and rose by 4.26% in the third quarter. The performance of the silver ETF, SLV went positive in the third quarter. Now it is up 9.64% year to date and gained 11.10% in the third quarter.
The price of crude oil is up for the year and we have seen some of that price increase at the gas pump, but it has dropped recently. The crude oil ETF, USO has risen 17.39% year to date, but fell -5.81% in the third quarter.
Looking ahead to the remainder of the year there are several events to follow that could have an impact on the markets. The Federal Reserve Open Market Committee, the FOMC will hold two more meetings on interest rates this year, one in late October and one more in December. More interest rate cuts are anticipated. There will be a meeting between the U.S. and China on trade issues and that could certainly affect the markets, along with BREXIT and third-quarter earnings reporting.
Kenneth Roberts is a Truckee-based Registered Investment Advisor. Information is at his blog at http://www.sellacalloption.com or 775-657-8065. The mention of securities should not be considered an offer to sell or solicitation to buy investments mentioned. Consult your investment professional to understand the risks and/or how the purchase or sale of these investments may be implemented to meet your investment goals. Past performance is no guarantee of future results.
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