Wednesday, November 14, 2018

TELFPlus Investment commentary Miles Capital, Investment Advisor
October 10, 2018

The economy and financial markets remained strong during the 3rd quarter, and leading economic indicators are now at highs not seen since 2006, indicating continued growth. Investors are still concerned about the progression of the Federal Reserve (the Fed) raising rates as well as tariff rhetoric, but corporate earnings and sales were strong for the second consecutive quarter. Labor markets remain strong with unemployment at 3.9%, and we continue to see more indications of some wage increases on the horizon. The risks to the economy include tariff risks, geopolitical volatility, and inflation, which may lead the Fed to change its interest rate trajectory.

Third quarter fixed income market returns were again heavily influenced by the September 25 basis point increase in the Federal Reserve rate, as anticipated by the markets. During the quarter, the two-year Treasury yield rose 29 bais points to 2.82 percent while the ten-year Treasury rose only 20 basis points to 3.06 percent, increasing the "flatness" of the yield curve. The Federal Reserve seems positioned to raise rates one more time this year.

The views expressed herein are the current views of Miles Capital as the stated date and are provided for informational purposes only. They are believed to be correct, but accuracy and completeness cannot be guaranteed and should not be relied upon for legal or investment decision purposes. All expressions of opinion and predictions presented are subject to change wihtout notice. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any securit. Past performance is not a guarantee of future results.

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