Four Lessons from the Third Quarter of 2018

Source: jpmorganchase.com | Re-Post MNM Partners, LLC 11/07/2018 – 

Despite escalating trade tensions and an unexpected stock market stumble, the economy appears to be maintaining its momentum as it nears full capacity. From the rebounding energy sector to strengthening North American economies, these are the four lessons that stand out from the third quarter of the year.

The third quarter of 2018 brought a few surprises—including escalating trade tensions and a stock market stumble—but none that suggest the economy’s momentum is slowing. Inflation remains within its target range despite the arrival of full employment, allowing the Federal Reserve to adopt a neutral policy stance that could help prolong the economic expansion. With few apparent imbalances on the horizon, the current business cycle may prove historically durable. These are the four main lessons from the third quarter.

1. Stock Market Volatility May Signal Cycle Maturity

After setting record highs in late September, stock indices suffered a bout of volatility in October. Equities have returned all of their 2018 gains over the past month, erasing almost $2 trillion in wealth from household portfolios. The reasons behind the market’s jitters are still unclear. Most of the headwinds facing corporations have been apparent for some time, yet the market’s rise had been relatively tranquil until this autumn.

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