Market Index Returns September 2019

Dear Clients and Friends,


For the month of September, global stocks rallied +2.10%, the S&P 500 rallied +1.87%, emerging markets equities gained +1.91%, while the Barclays U.S. Aggregate Bond Index lost -0.53%, and Barclays 1-10 Year Municipal Index lost -0.73%. Markets bounced from the August low-point based upon hopes for progress on trade talks between the US and China. While both sides have offered conciliatory words market uncertainty remains high and the likelihood of a short term resolution is not strong.


In the meantime, there have been several shocking “negative” developments in the last two weeks. First a dramatic decline in US manufacturing PMIs which are now showing significant contraction, and secondly an unexpected “miss” in US employment data. These were followed by a larger than expected slowdown in service (non-manufacturing) PMI growth.


The New York Fed model is now showing a 38% probability of a recession in the next twelve months. Since 1960, the US has experienced a recession every time this indicator was 30% or higher, only missing once in 1967. See last chart in the appendix.


If you would like to read further or see the tables and charts please click here.




John Bailey and Michael Mahaffy

Managing Partners

Spruce Investment Advisors LLC