October Market Review

October market review

Even with
the government shutdown casting a shadow over Washington D.C., equity markets
have continued their upward march, fueled by a trifecta of positive surprises:
cooler-than-expected inflation, another rate cut by the Federal Reserve (Fed)
and easing trade tensions.

·
Year-over-year
headline inflation ticked up slightly in September while core inflation, which
excludes volatile energy and food prices, ticked downward. Inflation remains
above the target rate but on net this was a better result than the market
expected.

·
In
light of better-than-expected inflation numbers, the Federal Reserve cut
interest rates by another quarter point in October, bringing the target federal
funds rate to 3.75-4.00%. The cut is intended to provide relief to a weakening
labor market.

·
US-China
trade tensions briefly rattled the market ahead of President Donald Trump’s
trip to Asia, but rebounded quickly, and the meeting between Trump and
President Xi Jinping reduced the temperature of the trade dispute.

Mega-cap
tech stocks, flying high on investors’ enthusiasm for AI and AI-related capital
expenditures, continue to dominate.

“With
valuations now sitting in the top 1% of the past two decades and much of the
good news already priced in, we remain cautious,” said Raymond James Chief
Investment Officer Larry Adam. “Any disappointment could trigger a modest
pullback, though we would view it as a healthy correction within a still-strong
bull market, underpinned by solid fundamentals.

Pendle Hill
Advisors is proud to contribute to the Montgomery County News with our weekly
curated financial news and topics. If you have any questions about the markets,
your financial plan, or anything, please feel free to reach out to our office
for a no cost initial consultation.

Kent Pendleton, AAMS®

Financial Advisor, RJFS

Pendle Hill Advisors LLC

14375 Liberty St, Ste 109 |
Montgomery, TX 77356

T 936-297-8267

Kent.Pendleton@raymondjames.com | www.raymondjames.com/pendlehilladvisors

Material
created by Raymond James for use by its advisors. Securities
offered through Raymond James Financial Services, Inc. Member FINRA/SIPC.
Investment advisory services are offered through Raymond James Financial
Services Advisors, Inc. Pendle Hill Advisors is not registered broker dealers
and is independent of Raymond James Financial Services.

Investing
involves risk, and investors may incur a profit or a loss. All expressions of
opinion reflect the judgment of the Raymond James Chief Investment Officer and
are subject to change. There is no assurance the trends mentioned will continue
or that the forecasts discussed will be realized. Past performance may not be
indicative of future results. Economic and market conditions are subject to
change. Diversification does not guarantee a profit nor protect against loss.