Menu
Equities Inch Higher as Investors Assess Inflation Reports, Fed Meeting Minutes, and the start of Earnings Season

Equities Inch Higher as Investors Assess Inflation Reports, Fed Meeting Minutes, and the start of Earnings Season

Equities Inch Higher as Investors Assess Inflation Reports, Fed Meeting Minutes, and the start of Earnings Season

Equity markets inched higher last week as investors digested inflation reports and Fed meeting minutes. Global equities (represented by the MSCI All Country World Index) were up 0.70%, and domestic stocks (represented by the S&P 500 Index) were up 0.47%.

Inflation

Inflation reports in the form of the Consumer Price Index (CPI) and Producer Price Index (PPI) were released last week for September. Headline CPI remained steady with the previous month’s reading of 3.7% on a year-over-year basis. Excluding food and energy costs, core CPI fell to an annual rate of 4.1%, down from August’s 4.3% reading and the slowest pace since September 2021. Producer prices surprised to the upside, however, as the core PPI reading showed an annual increase of 2.7% for September, ticking up from August’s 2.5% reading.

FOMC

Last Wednesday’s release of the FOMC’s September meeting minutes showed a divide among policymakers for the need for further rate hikes. The tone of the Fed shows a change from how high rates need to go to how long they need to hold them higher.

Futures

With the Fed minutes, inflation reports, and geopolitical uncertainty in the Middle East last week, federal funds futures markets began pricing in only a 5.7% chance of a 0.25% rate hike in November compared to a 27.1% chance the week prior according to the CME FedWatch Tool.

Earnings

Earnings season kicked off last week with major US banks starting to report results. Positive earnings surprises from Citigroup, JPMorgan Chase, and Wells Fargo helped boost large-cap value stock performance. According to FactSet, analysts are forecasting Q3 earnings growth for the S&P 500 of 0.4%. If earnings growth is positive this quarter, it would snap the string of three quarters of consecutive earnings declines.

Retail

This week a report on US retail sales will be released for September. Retail sales have remained resilient despite higher inflation as August’s month-over-month sales rose 0.6% and July’s rose 0.5%.

I’d like to leave you with the final line we’ve used since we started these commentaries back at the very height of market volatility in March 2020. Always remember that we create financial/investment plans not for the easy times, but to prepare for the tough ones.

Mike Horwath

Mike heads the internal Investment Committee that is responsible for the investment direction of the firm. He works closely with Diversified’s financial planners to support the investment side of the lifelong financial planning process. Lastly, it’s Mike’s responsibility to oversee the ever-changing global investment landscape and work with the planners to evaluate the impact on each of our client’s strategies.

Related Posts

Financial planning and Investment advisory services offered through Diversified, LLC. 

Diversified is a registered investment adviser, and the registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the SEC.

A copy of Diversified’s current written disclosure brochure which discusses, among other things, the firm’s business practices, services and fees, is available through the SEC’s website at: www.adviserinfo.sec.gov.

Diversified, LLC does not provide tax advice and should not be relied upon for purposes of filing taxes, estimating tax liabilities or avoiding any tax or penalty imposed by law. The information provided by Diversified, LLC should not be a substitute for consulting a qualified tax advisor, accountant, or other professional concerning the application of tax law or an individual tax situation.

Nothing provided on this site constitutes tax advice. Individuals should seek the advice of their own tax advisor for specific information regarding tax consequences of investments. Investments in securities entail risk and are not suitable for all investors. This site is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction.

Please note, the information provided on this website is for informational purposes only and investors should determine for themselves whether a particular service or product is suitable for their investment needs. The content on this website is not intended to provide tax, legal, or accounting advice, and you are advised to seek out qualified professionals that provide advice on these issues for your individual circumstances.

Diversified, LLC is an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the SEC. Diversified only transacts business in states in which it is properly registered or is excluded or exempted from registration.  A copy of Diversified’s current written disclosure brochure which discusses, among other things, the firm’s business practices, services and fees, is available through the SEC’s website at: www.adviserinfo.sec.gov. Diversified does not provide tax or legal advice and individuals should seek the advice of their own tax or legal advisors for specific information regarding their situations. Investments in securities involve risk, including the possible loss of principal. The information on this website is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction.

www.finra.org | www.sipc.org | Privacy Policy