Blog (Under Renovation)

Of course, we never like to see the global markets go down. However, when you look beneath the surface, the U.S. economy is still doing far better than what this week's performance implies. Behind the losses and ongoing election exhaustion, there are a number of strong indicators that the economy is growing.

One of the questions on every investors' mind these days is the upcoming November elections and how they might move markets. We published a special video update on this topic last week for our clients, and in this blog post we will highlight the key points from that video.

Why did Deutsche Bank affect markets?

Last week, concerns about one of the world's largest banks caused investors to worry that a new "Lehman moment" might spark a new financial crisis.

The U.S. stock market is facing a dilemma based on mixed information and an uncertain political landscape. On the one hand, economic data is neither weak nor strong enough to make the choice to raise interest rates easy for policymakers. On the other hand, the unpredictable nature of the presidential race is contributing to market volatility.

The August jobs report showed that the economy gained 151,000 new jobs instead of the 180,000 jobs predicted by economists. Since investors are keenly watching the odds of a rate hike ahead of the mid-September Federal Open Market Committee meeting, they treated the jobs miss as a win since it might reduce the chance of a rate hike this month.

Even as the Fed has kept interest rates flat, an unexpected surge in short-term interest rates triggered by an industry rule change is potentially doing some of the Fed's work for it.

Strategists continue to wonder what the Fed is thinking about the future of short term interest rates. Minutes from the July Federal Reserve Open Market Committee meeting showed that officials are split about the economic outlook and when to raise rates.

Among last week's major events was a surprisingly good July jobs report. Last month, the economy added 255,000 new jobs, beating expectations of 180,000 jobs. Even better, the gains were broad-based and the labor force participation rate (an area of concern because fewer people in our population were actively participating in the labor force) ticked upward.

Stocks were up for the third week in a row, posting record highs on better-than- expected earnings results and solid domestic economic data. Since the bottom of the post-British referendum selloff, the S&P 500 has gained 8.06%.  For the week, the S&P 500 gained 1.49%, the Dow grew 2.04%, Corporate Bonds fell 0.86%, and International Stocks grew 3.65%.

Stocks fell sharply last week in response to Britain's vote to leave the European Union (known as the Brexit), putting major indices in the red for 2016. Why did markets react so badly?