The S&P 500 closed October 30th at 2126.15, down 1.9% on the month and up 4.1% on the year. The DJIA is up 4.1% and NASDAQ up 3.6%.

​The ​Core PCE Price index is running +1.7% year over year.

The U.S. Two-Year Note yields 0.85%.

The Ten-Year U.S. note yield is 1.83% and the 10 Year German Bund is +0.16%, up 28 basis points this month.

Global interest rates rose sharply in October, as the lows on yields for 2016 and perhaps this interest rate cycle may have been seen this summer.

Q3 could be the first time the S&P 500 Index has seen year over year earnings growth since Q1 2015, ​per Fact Set.

All eleven sectors have contributed, led by financials. ​

The Fed meets ​next week, but is expected to stay any interest rate hikes until the December meeting, which according to latest statistics has a 78% chance ​for a rise in the Federal funds rate.

With the election on November 8th this "soap opera" race will conclude in a week.

However, if Ms. Clinton is elected as markets expect, with ​the FBI probe still

​underway, all parties might have to wait for the final episode until January.

Having ​weathered the weakest cyclical part of the market year with higher profits in the offing, stocks may well rise into year end. Average gains in the last two months of the year are typically ​+​3.8%.

​With inflation pick​ing up due to wage increases, bonds should have a harder time than stocks holding on to their yields. That of course is conventional wisdom.

However, there is not much conventional about these economic or political times​

If you have any questions or concerns about your accounts, please set up a meeting or conference call.

Happy Halloween!

Doug Coppola

John Coppola

October 31, 2016

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