Kuwait: October 8, 2017
SEPTEMBER 2017: STEADY ENOUGH GROWTH FOR CENTRAL BANKS TO ADJUST COURSE, BUT VERY SLOWLY
Going into the fourth quarter, the world economy and international markets appear to be on a steady, little changed, track. Stocks are moving up, making or nearing new highs in some cases (US, Germany, UK). Interest rates may be trending gradually and slowly higher, though they are lower than at the beginning of the year in some advanced economies. The USD remains under pressure, especially against the euro, and oil prices have stabilized somewhat in recent weeks, though they are lower on the year, and analysts are divided on their direction ahead.
Global equities continue to perform well posting a gain of 1.8% in September, as measured by the MSCI All Country World Index. US equities continue their positive run, closing up 1.9% and 2.1% for the S&P 500 and Dow Jones, respectively. Both indices, on a year to date basis, have returns in excess of 10%. US equity markets again reached new highs despite the natural disasters hitting the US mainland and North Korean tensions. Supporting the markets was President Trump’s announced tax reform, cutting the corporate tax rate from 35% to 20% and temporary resolution of the debt ceiling issue. In terms of monetary policy, the Federal Reserve did not hike rates and confirmed that it would begin unwinding its balance sheet as was previously signaled.