Statistic of the Week:
Education level matters in determining net worth. While the median net worth for college grads has only grown 2% from 2013 to 2016, those with only a high school degree grew 25% over the same period. The difference in growth rates is staggering, but so is absolute net worth. For H.S. grads: $67,100. College: $292,100.
Protectionism in the US may be rearing its ugly head. The US Department of Commerce ruled to impose punitive tariffs on a line of Bombardier passenger jets. The decision found that Bombardier may have received state aid from both Canada and the UK. A potential downside for the US: less military jet sales to these allies.
Market Moving Events:
Monday: ISM Manufacturing, Construction Spending Wednesday: ISM Non-Manufacturing Thursday: Jobless Claims, International Trade, Factory Orders Friday: Employment Situation, Wholesale Trade
With three quarters in the books, global equity markets have been having a notable year. Strong profit growth has been driving US equities higher. The NASDAQ led the pack last week, up 1.25%,1 while the S&P 500 rose 0.68%.2 Both of these indices hit all-time highs.3 Year-to-date, the DJIA has increased 13.37%,4 as the more diversified S&P 500 lags slightly, up 12.53%.5 To put September behind us, a month where the DJIA historically loses about 1.09%,6 near record levels for the index, underscores the strength of the current rally. Fixed income markets felt the optimism in equities as yields rose. The 10-year Treasury finished Friday with a yield of 2.33%.7 As we look towards the fourth quarter, there are a couple notable items to consider. First, there is significant anticipation around the concept of a tax reform package from the White House and Republicans in Congress. Besides being a political “must win,” equity investors have been looking to see tax dollars fall to the bottom line. Should the plan go through, companies with a domestic focus could see a bump in valuations. Next, and arguably most importantly, is the geopolitical situation. Last Monday, markets took a tumble when North Korea mistakenly thought that the US had declared war. While we are not exactly sure how mistakes of that magnitude happen, they do have the tendency to rattle investor confidence. With Secretary of State Tillerson saying that the US is in contact with North Korea, the trajectory will influence investor outlook. - Dan McElwee, CFP®
Chart of the Week: