Global Investment Outlook and Strategy
October 9, 2018
Following strong monthly performance in both July and August, U.S. and global equities generated muted returns in September ahead of calendar third quarter corporate earnings reports. The telecom, healthcare, energy, and industrial sectors contributed to the positive performance of large cap indices, while interest-rate sensitive sectors detracted. In terms of the U.S. economy, the combination of unorthodox late cycle fiscal stimulus and deregulation has countered the impact of measured monetary tightening and contributed to a notable acceleration in U.S. economic growth, with real GDP on pace to increase +3.0 percent in 2018 versus the compound annual growth rate of +2.2 percent over the prior five-year period. We believe the current Fed tightening cycle will lead to higher volatility and lower correlations, providing more opportunities for stock picking. An emphasis on quality growth and dividend paying stocks trading at attractive valuations will serve investors well going forward. Bond market yields rose during September and the third quarter of 2018. The job market is strong as the number of jobs available is at record high and climbing. In addition, consumer and business confidence is higher and wages are finally increasing faster than inflation, leading us to believe the long end of the yield curve is likely to accelerate its recent yield increases. The bear market for bonds is expected to continue well into the next several years as the Federal Reserve continues to raise the Federal Funds rate in December and March of next year with further rate increases to above the 3% level by 2020.
For more details, including a longer discussion of high growth stocks, please see Sit Investment Associates’ October 2018 Global Investment Outlook and Strategy paper. Click here: Global Outlook and Strategy (Adobe Acrobat) or e-mail us at: email@example.com.
MMAF Has Awarded Over 16,500 Grants
Since its inception in 2005, Minnesotan’s Military Appreciation Fund (MMAF) has awarded over 16,500 grants totaling over $10.5 million to Minnesota military personnel and their families. MMAF is a non-partisan, non-political 501(c)(3) non-profit corporation. It is a statewide fundraising initiative by the citizens of Minnesota. Its mission is to say “thanks” to Minnesota service members and their families by providing cash grants to those who are making sacrifices in the defense of our freedoms in combat zones around the world.
The tragedy of 9/11 compelled the late Eugene C. Sit, founder of Sit Investment Associates Inc., to create MMAF in order to thank and give back to Minnesota service members. Sit Investment Associates Inc. continues to support the efforts of MMAF.
To donate and learn more about Minnesotans’ Military Appreciation Fund, please visit the website at www.thankmntroops.org.