Market Commentary – October 20, 2015

Current Conditions

The markets have finished up over the past week with the S&P 500 up 1.6% and the Dow Jones up 0.8%.
We’re in a rally but it’s still good to play things safe and keep a balanced outlook in your portfolio.

Summary of Global Markets for Monday October 20, 2015

Click the image above to zoom in and see the full Global Market Summary.

Asset Classes

Top asset classes for the past week include biotech (5.1%) and healthcare (3%), which have rallied a bit after being in the bottom 5 asset classes for the past month.

Real estate (3.1%) has continued its rally as a top performer for both the past week and month.

Commodities round out much of the worst performers for the week and month.

Economic Strength Index (ESI)

The ESI ranks the US economy on a scale of 0 to 100 (worst to best).

60%

Currently the ESI is stable, having had a range between 60% to 70% for the past few months.

The economic outlook is positive.

Commentary

The recent rally has been caused by the same speculation that caused it to drop after the September Fed meeting…namely the Fed’s move to keep interest rates near zero. Wall Street wants economic news is somewhat bad so that the Fed doesn’t think interest rates should be raised. Economic data that is too bad or too caused will likely, however, send markets reeling.

Due to the recent economic releases showing softness in the measures the Fed likes, we’ve experienced a multi-week rally. For more information, read my post about the Fed’s interest rate decisions.