Stableford Capital Insights

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.[caption id="attachment_2785" align="aligncenter" width="1913"]

Figure 1 Stableford Capital Market Commentary October 2019[/caption]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).[caption id="attachment_2786" align="aligncenter" width="1920"]

Figure 2 Stableford Capital Market Commentary October 2019[/caption]Are you interested in making portfolio changes or getting a more in-depth analysis? Contact Stableford today by calling 480.493.2300 or simply request a free trial of our Market Blast.COMPLIMENTARY TRIAL OF THE STABLEFORD MARKET BLASTThis 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.