Market Action

• The September meeting of the Federal Reserve came and went without a change in monetary policy. Citing the effects on inflation from global weakness Janet Yellen still reiterated expectations for a rate increase this year. Stocks rallied initially on the news before giving back their gains and closing down on the day and losing some ground this week.
• With monetary policy staying steady interest rates came down across the board. Short term rates had rallied in the days leading up to the Fed meeting but quickly reversed course. With global volatility and the Fed staying the course yields have fallen over the past month, leading the Financials sector to being the worst performing sector over that time period.
• The European trade surplus hit a new record according to data that was released this week. While countries such as Germany, Spain and Belgium have been reporting strong economic data lately, future projections have become more dire due to weak demand in China.
• Credit to Russian companies remains at its lowest point since 2004. The Russian economy has been decimated by low energy prices and sanctions from the West over tensions with Ukraine.
• Greeks will go to the polls once again this weekend to elect a new government. The new bailout accord with the troika led to PM Tsipras losing control of his party. Indications are for a close call between Syriza and the Conservative New Democracy party. A new government could mean that EU officials have to revisit the bailout agreement.
• Goldman Sachs released an updated forecast for oil prices, estimating that prices will hit $20 per barrel, as the supply-demand mismatch is larger than originally anticipated. While the rig count has declined over the past few weeks, production continues to climb as drillers get more efficient.

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