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Wall Street to Your Street

View on current market decline

Global equity markets have experienced declines since the beginning of October, accelerating into their weakest performance of the month on Wednesday, Oct. 10. A multitude of factors contributed to this sell off. Trade friction, especially with China, and rising bond yields—catalyzed by stronger inflation measures and hawkish commentary about the path of future rate hikes by Federal Reserve Chairman Jerome Powell—seem to be the most notable catalysts. Other contributing factors were uncertainty over continued profit growth as the market awaits third-quarter earnings results; political uncertainty given the upcoming midterm election and its implication for policy; and finally, faltering market leadership from big technology stocks. However, a very simple reason for this sell off may be that the market was due for a pullback after a somewhat surprisingly strong recovery from the February correction—a view supported by the relative stability of bonds and spreads despite the equity market volatility.

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Oct 2018 Market Outlook: Can strong earnings growth trend continue?

It has been a banner year for corporate earnings growth through the first three quarters of 2018, with S&P 500® earnings up about 20% year-over-year in the third quarter following growth of better than 25% through the first half. We also expect strong earnings growth in the fourth quarter of about 15% to 20% year-over-year

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Sept 2018 Market Recap: Interest rates rise as Fed keeps pedal to the metal

Interest rates have been trending up as the Federal Reserve Board (Fed) continues its gradual rate hike policy. On September 26, the Fed raised the rate 0.25% to a range of 2.0% - 2.25% – the third hike this year and the eighth since December 2015. The Fed indicated that there may be one more small rate hike in December followed by up to three more in 2019.

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Active versus Passive: The great debate

Will actively managed mutual funds continue to be the dominant investment approach in the years ahead, or will passive investments, such as index funds, overtake them?

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