Third Quarter 2018 – “Same Questions”
Questions that dominated the first half of the year remained at the forefront during the quarter, as investors continued to assess the impact of rising interest rates in the US and of trade wars and tariffs between the US and its global trading partners. Equity markets ended the period with mixed results. Domestic equity markets performed well; the S&P 500 gained 7.7%, while the MSCI EAFE increased by 1.4% and the MSCI Emerging Index declined by 1.1%. US markets climbed higher, as a number of large-cap stocks announced record earnings, while international markets were muted due to the strengthening of the US dollar, tariff tiffs, and political disruption. Domestic economic indicators were very positive, with unemployment falling to record low levels and record earnings in corporate profits. Meanwhile, internationally, data was good on average, but muted in comparison, with the exception being a handful of “frontier markets” that showed signs of contraction.