Despite some weakness throughout developed economies internationally, most economic indicators in the U.S. appear to have gradually improved in recent months. Overall, the economy appears on track to sustain a moderate pace of expansion during the closing months of the year.
- Capital markets sold off broadly during September.
- Domestic equities fell throughout the month, led lower by small cap names, which declined enough to pull the index into negative territory thus far for the year.
- The yield curve steepened during the month, as short-term rates remained anchored near zero and rates between 10 and 30 years rose modestly, also dragging on year-to-date returns.
- Alternative investments joined stocks and bonds in losing ground during the month. After beginning the year with a strong performance, commodities have recently faced some headwinds that have pushed the index into negative territory year to date.
- U.S. economic data remains positive. Job growth surged again in September, providing further support for the Fed to announce a wrap up of its QE3 program during October. The timing of the first rate hike remains a wild card for the capital marketsDomestic equities extended their rally in August, nearing double-digit returns year to date. Small caps led the pack but continue to trail for the year.