Market Action

• Stocks in the U.S. posted another week of gains and have largely recovered from their period of volatility in August. With the Fed Funds Futures and Bond Markets pricing zero rates into 2016 stocks may have more room to run this year.
• While markets in the U.S continue to price in lower rates for longer Goldman Sachs released a projection that the ECB would extend QE past the current September 2016 target end. ECB President Draghi has publicly credited QE with reviving credit growth and inflation pressures within the monetary union.
• China’s Shanghai Index rose by more than 6% this week, putting the market back in positive territory for the year. China releases its GDP numbers for Q3 on Monday, something analysts are eagerly awaiting. Private projections of sub-5% growth are becoming more popular in the face of the government’s official 7% target.
• Gold has rallied over the past two weeks to reach its highest point in the past few months. With rates expected to remain low for longer the dollar has slipped and gold has risen.
• Dell announced the purchase of EMC in what will be the largest transaction in the history of the technology sector. M&A deals in 2015 are poised to break the highs set in 2007 in spite of recent market volatility.
• Retail sales in the U.S. came in below expectations according to new data. Given the dramatic fall in energy prices most analysts and economists were forecasting for consumer spending to propel the economy. However, the GDP Tracker from the Atlanta Federal Reserve Bank is forecasting Q3 GDP to print below 3%.
• The U.S. Treasury Department and officials from Puerto Rico are in discussion on a “superbond” that would help restructure the island’s debt load of $72 billion. Under the plan the Treasury would administer an account that pays investors from Puerto Rican tax revenues.

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