Equities posted their best weekly gain for the year. Oddly, the market swooned two weeks ago when the Federal Reserve failed to raise short-term interest rates, and this week traders praised the FOMC minutes that low inflation and slower global growth would likely delay a rate hike. Go figure. But given the third quarter’s 7% market decline, I’ll take the incongruous upward move. Commodity prices and oil helped investors feel a bit more sanguine about the market with crude up over $4.00/bbl. or 9% – the best weekly gain since August – to nearly $50. And gold spiked around $20/oz., reflecting a weaker dollar in anticipation of a less-likely rate hike. These conditions helped the energy stocks move higher by 8.2% on average and basic materials popped nearly 7.5%; the two strongest sectors for the week. With the exception of health care, which was virtually flat, all other sectors rose. The Dow Jones Industrial Average was ahead by 3.7% and the S&P 500 gained over 3%. Rails, truckers and airline stocks saw buyers with the Dow Transports moving higher by nearly 5% over the past five trading sessions. The biotech-heavy NASDAQ was the sole laggard, but still managed a 2.6% advance thanks to gains in some of the beaten down technology stocks. One byproduct of the continuation of low-interest rates is that there still remains few viable investment alternatives to equities, even if rates start to climb later this year or early in 2016. The average yield on stocks is about 2.7%, which handily beats cash equivalents and bond options. Hopefully, Alcoa’s woeful third quarter earnings are not a harbinger for other companies as earnings season begins in earnest over the next few weeks. Blog followers will be on the lookout for results from money-center bank JPMorgan Chase on Tuesday along with other bell weathers Intel, Johnson & Johnson and east coast rail CSX. Thursday we will hear from oil service provider Schlumberger, which will do well to report earnings of about half of what it produced in the third quarter of 2014. If you are one of the lucky few and have Columbus Day off – Enjoy!
Here is the answer to last week’s trivia question: Which company is the largest provider of mutual funds, based on assets under management? Vanguard; Black Rock; Fidelity; or State Street Global Advisors. Answer: Black Rock. With the dramatic growth in exchange traded funds, Black Rock manages approximately $4.8 trillion in assets, including over 700 unique iShares ETF’s . If you exclude exchange traded funds, then Vanguard gets the prize, with over $3 billion in assets under management.
Today’s Trivia Question: The Toronto Blue Jays, battling the Texas Rangers for the American League Division title, is owned by? Sandstone Asset Management; Labatt Brewing Company; Rogers Communications; or the Toronto Teachers Retirement Fund.