Financial market indexes finished higher in October after two consecutive months of declines. The S&P 500 Index was up 8.30% led by the materials sector, while the Dow Jones Industrial Average finished up 8.47% led by E.I. du Pont de Nemours (DD, Financial) and Microsoft (MSFT, Financial).
The final week of October included some key data reports and a Fed statement indicating an increase in the federal funds rate is likely for December. The seasonally adjusted annual rate for third quarter GDP was reported at 1.5%, just below economists’ average estimate of 1.7%. The PCE Price Index, a standard gauge for inflation, showed price levels basically unchanged from August. The Price Index reported inflation at 0.2% over the previous 12 months through September, down 10 basis points from August. The Price Index, excluding food and energy, remained at 1.3% for the same period. Market indexes continued to remain stable during the week as the Federal Reserve delivered its October statement with no change to the federal funds rate as expected.
While the Fed’s key data points lacked robust improvement, the market’s increased valuations show global concerns have become less of a factor with a return to more stabilized volatility expected through year-end. In a recent discussion with CNBC, Jeff Korzenik of Fifth Third Bank, discussed the market’s strong gain in October and what investors can expect through the end of the year.
