During the quarter, equity markets recovered from the volatility driven by the United Kingdom’s unexpected vote to leave the European Union (Brexit), and the S&P 500 ended the period with a positive return. This rebound, along with stable economic data points, puts a Federal Reserve rate increase back on the table for later this year. Despite having bounced off of record-low levels, negative rates in Europe and Japan continue to be a major factor. Global investors’ focus on yield has driven a good portion of the returns this year, and some pockets of excess are developing. The U.S. economy continues to expand at a slower pace than expected, and the rebound in the industrial segment of the economy has been bumpy. Housing remains a bright spot. Low borrowing costs and healthy employment statistics should support further improvement and, by extension, greater consumer spending. Consumer confidence has reached levels not seen since 2007. The results of Election Day will be critical for various investment and financial planning considerations. In general, the first year of a presidential term has not been positive for the stock market or the economy. For now, we position portfolios for modest economic growth, although volatility may increase as November 8th nears.
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