With September now in the books, there is no doubt it was a newsworthy month. As usual, we offer a quick overview of market´s performance and starting in the US, more precisely the S&P 500, Dow Jones and Nasdaq, still showed impressive growth holding 20%, 16% and 22% gains since January. All indices overcame August´s losses this month.
Even though markets had a positive run, September closed with increased volatility caused by a possible impeachment to President Trump. This uncertainty brought turmoil to financial markets and will further dominate headlines.
Oil markets in September took the spotlight after a bombing over oil facilities in Saudi Arabia which were allegedly targeted from Iran. After the attack, oil prices rose 12% in one day. So far, it is still unclear how this major disruption will affect oil production and prices.
Rates Cuts & Brexit
Markets were also affected by important announcements from two of the most important Central Banks in the world. Both, Federal Reserve (Fed) and European Central Bank (ECB) lowered their interest rates. On the Fed side, this was the second 0.25% rate cut this year.
Keeping our focus on Europe, the days pass and the UK still has not reached a definitive Brexit agreement to offer to the EU. Prime Minister Boris Johnson affirms that the UK will not seek an extension to leave the EU. Moreover, he advocates to leave the trade union with or without an agreement by October 31st.
Also, in Europe, Spain braces for an upcoming presidential election after a failed attempt to establish consensus to set a stable government. Uncertainty in Europe battered the Euro to a 28-month low at 1.08.
On a more optimistic note, Apple marked September as the right moment to announce a brand-new iPhone 11. Additionally, the tech giant revealed its plan to launch a new tv streaming service that will compete with Netflix, Hulu, Amazon Prime Video and Disney+.
Now that the last quarter of the year begins, is time to set sight on the upcoming earnings announcements from the world’s biggest companies. This will confirm whether economic growth is still alive or starting to fade.
ETF on the Lead
Last but not least, September also marked a historic moment in market. For the first time since they were invented, passive investment funds (ETFs) surpassed traditional active funds (Mutual Funds) in total assets managed.
Passive investment funds, usually known as Exchange Traded Funds (ETFs) have been a powerful tool especially for less experienced investors who seek diversification as an investment objective. So far, they manage about $4.2 trillion worldwide.
“I love quotes… but in the end, knowledge has to be converted to action or it’s worthless.”