Obsidian Market Update

Good morning!

This week we’d like to give you a quarterly economic update and then share some cool stories about people helping where they see a need.

THE QUARTER IN BRIEF

The summer brought an economic rebound and a continuation of the stock market rally that began in spring. In late September, the Federal Reserve Bank of Atlanta’s GDPNow tracker estimated real Gross Domestic Product (GDP) growth of 32.0% for the third quarter. All three of the major Wall Street benchmarks advanced in Q3; the S&P 500 added nearly 8%, ending the quarter up about 4% for the year. Even so, U.S. equities slumped in September as traders worried that the stock market might be getting ahead of the economy.

THE U.S. ECONOMY

Asas measured by the Conference Board’s monthly index, consumer confidence leaped to 101.8 in August from 86.3 in July. Households kept up their buying—retail sales were up year-over-year through August even though supplemental unemployment benefits expired at the end of July. Industries also grew, according to research from the Institute for Supply Management.

Home sales soared as summer began, and although that momentum tailed off, sales did not retreat. Residential resales were up 24.7% in July, and another 2.4% in August.

For more than a century, the Federal Reserve has had two primary monetary policy objectives: to manage inflation and to guide the economy toward a state of maximum employment. Historically, managing inflation has come first. So, it made news on August 27 when Fed Chairman Jerome Powell announced that the central bank would “seek to achieve inflation that averages 2 percent over time,” rather than proactively adjust short-term interest rates when inflation approaches that established target. In other words, it would tolerate a little more inflation than it had in the past as a trade-off for spurring the economy.

Wall Street enters the fourth quarter with a bit of uncertainty. The November election results may produce any number of reactions. There are only educated guesses about when coronavirus vaccines may appear and how effective they may be.

Federal Reserve officials expect low-interest rates and very little inflation through 2022. Sustained low-interest rates could drive more borrowing and business investment and improve the outlook for the housing market.

We checked in with Sean McCarron, our Client Service Specialist, and here’s what he has to say. “Every day it seems that we are treated to hyperbolic headlines in the daily ‘news’.  At Obsidian Planning, we look at the information as outlined above when taking action or making recommendations. We hope you look to us for guidance or advice when faced with those, often, compelling headlines.”

In fun news, many people are really stepping up to help others, and nothing makes us happier than that! As the iconic Fred Rogers said, always look for the helpers. If you could use a boost this week, check out this dad making desks for kids who need them. Or this baker who is working with kids experiencing food insecurity. Also inspiring are the number of young people signing up to be poll workers to help protect the elderly from COVID-19. Is helping animals more your thing? Then you’ll love this story of a mine-sniffing rat who has saved countless lives.

As always, we love to hear from you. Give us a call any time to discuss your thoughts or concerns about the stock market, and let us be the helper you need as we navigate the next quarter together.

Past performance is no guarantee of future results.  Securities offered through Triad Advisors, member FINRA/SIPC. Advisory Services offered through Obsidian Personal Planning Solutions, LLC. Obsidian Personal Planning Solutions, LLC, and Obsidian Personal Planning Solutions, Inc, are not affiliated with Triad Advisors.