Weekly Market Commentary





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Erik Wasson, Justin Sink, Laura Litvan – Bloomberg Politics
Trump Sides With Democrats on Interim Debt-Limit Fix, Harvey Aid

Summary: President Trump agreed to extend the US debt limit decision by three months and nearly doubled total disaster funding to $15.25 billion. The agreement was part of the Harvey aid bill and will fund the government through December 8th. 

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Reuters Staff
Fed’s Fischer Resigns, Leaving Trump Earlier Chance to Shape Central Bank

Summary: US Federal Reserve Vice Chair Stanley Fischer resigned from his post citing personal reasons. His resignation will become official October 13th, eight months before his term was set to expire. The board of governors, which votes on monetary policy decisions, could now have as few as three sitting members instead of its usual seven. Analysts believe that Fischer’s resignation lowers the likelihood of another rate increase this year. 

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Sam Forgione – Reuters
Dollar Extends Drop on Outlook for Fed, ECB Policy

Summary: The US dollar hit a more than 2-1/2 year low against a basket of major currencies last week. A more dovish outlook from the Fed and a surging euro have been driving the dollar’s decline this year. Demand for dollars has also been declining following the recent hurricanes and debt ceiling discussions. 

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Karen Gilchrist – CNBC
Confused by the ECB? Here’s What Could Happen at its Important October Meeting

Summary: The ECB left interest rates unchanged and said that it will set out plans to end its economic stimulus program next month. The ECB is currently purchasing 60 billion euros worth of bonds each month. Analysts expect the central bank to decrease purchases to 35-40 billion euros but extend the program into 2018. Comments by ECB President Mario Draghi indicated that tapering the purchase program does not mean that the bank will raise rates. Despite the dovish outlook, the euro continued its rapid ascent.

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Bryce Coward, CFA – Knowledge Leaders Capital
Global PMIs Are Very Strong, But Does That Mean Anything For Stocks?

Summary: Global Purchasing Managers Index (PMI) data has drastically improved this year. PMI is a widely followed data point indicating the strength or weakness of an economic expansion. Global PMIs have been nearing historical peaks, leading some analysts to call for a stock market correction. A deeper dive into the data shows that PMIs tend to peak around one year before significant market declines. This indicates that the current market could still have some room to run over the short-term. 

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Jeffrey Kleintop – Charles Schwab
U.S. vs International: What do Earnings Tell Us About What May be Ahead?

Summary: Over the past 15 years earnings per share for both international and US companies have grown by the same amount but have taken different paths to get there. Kleintop shows that international companies experienced greater sensitivity to global growth, inflation, and business cycles. Current market expectations for stronger global growth and inflation should lead to higher earnings potential for international companies going forward. 


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