As we look ahead to the closing months of 2019, we believe that many of the issues that created uncertainty and market volatility over the past year, continue to remain a concern. Regardless of these issues, the US stock market (as measured by the S&P 500 index) has been extremely resilient and hit a new all-time high in October. The positive momentum has been fueled by good corporate earnings results, stronger than expected US GDP growth, another interest rate cut by the Federal Reserve, and relatively positive reports on US-China trade negotiations.

Over the past few weeks, we’ve had many calls about the yield curve, so I’d like to begin this month’s Perspective by providing a brief summary of what it is, what it means and why you should care.

As we enter the 4th quarter, the US equity markets are close to their recent all-time highs.  Meanwhile, on the fixed income side, the bond market has been selling off, causing interest rates to spike up to levels not seen in several years.  The rise in interest rates has been fast and furious over the past week, adding some additional fright to the often spooky month of October.

As we enter August, we hope you and your family are enjoying a peaceful, relaxing, and happy Summer. Normally, this time of year is the slow season for the markets, but as we have embarked on the second half of 2018, it appears that a new narrative has emerged.

Today, the U.S. equity markets extended declines into a fourth day as investors continue to digest news about impending U.S. steel and aluminum tariffs. President Trump tweeted that when the U.S. is losing billions in trade with virtually every country we do business with, we will soon be starting reciprocal taxes to charge the same thing they charge us. Trump is facing anger from manufacturers and trade partners in China and Europe after announcing tariffs of 25 percent on imported steel and 10 percent on aluminum. The formal order is expected to be signed next week.