Welcome to the monthly market update from Midland Wealth Management. I am Dan Zeigler, Senior Portfolio Manager. Today, I wanted to take a few minutes to give you an update on the markets for the month of September.

Market Returns for September:

The S&P 500 posted a record close at the end of September, overcoming its typical reputation for volatility. The S&P 500 rose 2%, marking the first positive September in five years, driven by a favorable interest rate environment. For the third quarter, the S&P 500 was up 5.82% and year to date is up close to 22%.

The stock market continues to show signs of broadening out, particularly with the performance of small-cap stocks. The S&P 600 index gained 1% in September and over the last three months is up 10%.

China recently announced a stimulus package that aims to revive its struggling economy with a focus on supporting the housing market and boosting overall economic activity. Additionally, the stimulus helped push Chinese stocks into having their biggest single-day gain in 16 years.

Federal Reserve/Inflation/Interest Rates:

The Federal Reserve made a significant move by cutting interest rates by 50 basis points on September 18th, marking its first-rate reduction in four years. This cut brought the federal funds rate down to 4.5% as part of the Fed’s effort to support the cooling labor market and stimulate economic growth as inflation pressures continue to subside. Federal Reserve Chair Jerome Powell said on Monday that more interest rate decreases could be forthcoming. However, they don’t have a set path. The bond market is predicting several more rate cuts this year and forecasting a fed funds rate of 3% by the end of 2025.

Outlook:

Investors will be closely watching the US jobs market report on Friday, October 4th, as it could influence the Federal Reserve’s next move on interest rates. Economists are projecting that the US adds 146,000 jobs in September and for unemployment to hold steady around 4.2%.

While the broader market performed well in September, analysts remain cautious as uncertainties tied to the US labor market, upcoming elections, and increased geopolitical risk could lead to increased volatility in the coming months.

Thanks for joining me for this month’s market update.