There are times when capital markets are sensitive to a whiff of any disturbances, with the least seeming un-important event causing dramatic sentiment and then of course capital movement.
We are not in those times currently!
Over the latest quarter, we have seen Mother Nature flex her muscles in some of the most terrible disastrous Hurricanes in a century. Participants and markets mostly relieved after the conclusion of multiple landings, took the damage in stride and continued to move forward.
On a regular occurrence, over the last 90 days, international countries have fired powerful test fired weapons, garnering much headline banter from neighboring countries, United Nation members and multiple leaders of countries. Participants and markets yawned and moved forward again.
An old foe of times past, debt ceiling concerns and debate, even arose during the latest quarter. Upon an extension capital markets had a relief moment but nothing near the size of just a few years ago, when even a whiff of debt ceiling talk sent participants running for cover and capital markets into a tailspin.
Our friends at the FOMC (Federal Open Market Committee) have set a plan to lower the balance sheet, over an extended period of time, slowly and diligently. Market participants and capital markets once again looked past the news and forward with very little disruption.
Today, capital market are acting like the Eveready Bunny; they just keep going, which is fine by us, but there will be a day when that changes as this has been one of the longest runs in market history with not even a 5% correction.
Happy Participants and Capital Markets have created a problem finding valuations that look inexpensive to reasonable as their ascent has pulled most domestic assets to high levels. Good news comes from our friend across the pond. It appears our international friends are getting their acts together in a big way and with a less rising Unites States dollar, the stars may be finally aligned for tailwinds from abroad.
Our core article in the coming Newsletter discusses from a high level several valuation metrics, world capitalizations and even the US currency, its long-term average and recent movement.
Historically we are entering a favorable time for market participants and capital markets as they frequently embrace in a positive way, the Holiday seasons. We will see if they do the same this year, and if not, we will be ready.
Have a good fall season and we hope to see you at our Holiday Party at the Dallas Arboretum the Saturday before Thanksgiving weekend.
John A. Kvale CFA, CFP