The markets were down slightly last week, as the Dow (-0.0%), NASDAQ (-0.5%), and S&P 500 (-0.6%) fell for the third week in a row. Conversely, small cap stocks (as represented by the Russel 2000) were up almost 3% and international stocks (as represented by MSCI-EAFE) were up 0.8%, so it seems that the losses were mostly with the domestic large caps and technology stocks. Bonds were very boring last week, as both tax free munis and taxable bonds stayed within 0.1% of their levels from the prior week.
Last week, the Fed announced that they were likely to keep interest rates near zero until 2023. In fact, all 17 Fed officials thought it would remain near zero through next year, and 13 of the 17 felt they would remain near zero through the end of 2023. Here’s my take: they will stay low until there’s a reason for them to not stay low. Duh, right? I’m old enough to know that we keep things the same until we choose or need to change them. Let’s also look at history a little. September is off to a lousy start, but that is “typical”, as September has historically been the worst month of the year. Let’s all be practical, though. In about six weeks, we have this thing going on in the US called the presidential election. I’m not saying that we will have an answer in six weeks, but I think we can all realistically expect that will drive the headlines until then, and the uncertainty will most likely impact the markets.