Stableford Market Commentary: October 2019

Is the Economy Beginning to Re-accelerate?

The S&P 500 increased 2% during October as investors began to believe that the economy is beginning to re-accelerate (Figure 1). This move off the recent October lows was propelled by diminishing fears of recession and trade wars. Recent high frequency economic survey data has begun to turn upward, and the US – China trade war has moved toward (at least a temporary) détente.

Stableford Capital Market Commentary October 2019 Figure 1
Figure 1 Stableford Capital Market Commentary October 2019

 

It is unclear how long the positive views will last with the market trading at a not-inexpensive 18x CY20 EPS and few prospects for earnings growth beyond mediocre mid-single-digit levels. However, with optimism on the rise and many fund managers underinvested and living with heightened FOMO (fear of missing out), the market may continue higher.

Slight Rise in October

Yields on the US 10 Yr. rose slightly during October to 1.7%. With the Fed now on hold and economic prospects stabilizing, we may have seen the short-term low in early September at 1.46% (Figure 2).

Stableford Capital Market Commentary October 2019 Figure 2
Figure 2 Stableford Capital Market Commentary October 2019

 

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This market commentary was written and produced by Stableford Capital, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested in directly. The views stated in this letter are not necessarily the opinion of any other named entity and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.

S&P 500 INDEX: The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure the performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

Justin Thomas
Justin Thomas
Justin Thomas, CPA has worked for over 15 years as a portfolio manager and analyst managing institutional assets for hedge funds and large financial institutions. He has a MBA and Masters in Accounting from Northeastern University and an undergraduate degree in Economics from Tufts University. Justin is a managing partner at Stableford Capital.

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