July 1st Through September 30th, 2015
After an anemic first six months of 2015, July and the first week of August showed a slow, but steady ascent for world markets, but by the second week of August, things were set to change.
The third Quarter turned into quite a wild ride of volatility, with global stock markets retreating. China’s stock market Plunged during the summer, stoking fears of a global recession. It has since stabilized, but was down about 42% from mid-June through the end of August[1].
The fed was expected to finally raise rates at least a quarter point in September, but after the losses in markets, they held the zero rate policy steady; however, this did not please many investors, as a rate was generally already priced into stocks, and it concerned investors that the Fed still sees too much weakness in the economy.
Nearly All major US, International developed and emerging market equites were down for the quarter. In fact from August 17th to September 28th, the high to the low for the S&P 500 saw the index drop down slightly more than 10%[2]. U.S. Value and Small stocks were hit harder than large growth in the quarter.
High quality bonds were up slightly, while high yield bonds lost value. US Real Estate gained about 3%.
While the volatility has declined considerably, last week we learned that the US GDP for the 3rd quarter showed a significant slowdown, and preliminary results show it only grew at an annualized 1.5% down from a 2nd quarter 3.9%. Consumer spending was reasonably strong however, holding out the possibility of a strong holiday season. Man y analysts believe that the 3rd quarter downtrend was oversold.
[1] morningstar
[2] Ibid
