With 2016’s all-important final quarter at the doorstep and third quarter data continuing to trickle in, hopes for a sharp second-half rebound have begun to fade.The Atlanta Fed’s closely watched GDP Now forecast for growth in the July-September quarter ended September at 2.4%, well below the 3.5% estimate at the end of August. At the same time, no one is seriously talking recession, just more of the same: muddling along while awaiting the key event of the year: the presidential and congressional elections.
Federated Investors 3Q 2016 Market Overview
- Equity performance remained mixed in September as an agreement to cut OPEC production buoyed energy shares and news that the Fed would remain in a holding pattern helped fuel a rally off mid-September lows.
- Economic data also provided a source of encouragement late in the quarter as forces that had been aiding U.S. growth—housing, auto sales and service-sector activity—lost some momentum but remained relatively robust.
- Back-to-school sales disappointed, but consumer spending overall remained healthy, as did job and wage growth.
- Manufacturing continued to struggle, although there were signs of a potential pickup late in the month.
- Meanwhile, European financial stocks ended the quarter under a dark cloud, with the U.S. Department of Justice proposing a $14 billion settlement with Deutsche Bank related to the sale of mortgage securities from the mid-2000s.
To continue reading the commentary, including details on the performance of Federated Investor's Strategic Value Dividend portfolio, click here. Or, review JP Morgan's 4Q 2016 Guide to the Markets.
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