Effective Federal Funds Rate, 1954–2018

Much of the anxiety seen in the stock markets in the fourth quarter of 2018 was the result of aggressive comments emanating from the Federal Reserve regarding the disposition of the securities on its balance sheet. Suffice it to say that short-term interest rates are being “normalized”—that is, brought back into historical norms from the lows of 2008.

U.S. & World Equity Indexes; 12/31/18; YTD Return
S&P 500; 2,506; −6.20%
Dow Jones Industrials; 23,327; −5.60%
Nasdaq Composite; 6,635; –3.90%
Shanghai Composite (China); 2,493; −24.60%
S&P BSE Sensex (India); 36,254; 7.20%
Nikkei Stock Avg (Japan); 20,014; −12.10%
CAC 40 (France); 4,730; −11.00%
DAX (Germany); 10,558; −18.30%
FTSE 100 (U.K.); 6,728; −12.50%
Selected Interest Rates; 12/31/18; 11/26/18
15-Year Mortgage; 4.01%; 4.24%
30-Year Mortgage; 4.55%; 4.81%
5-Year Treasury Bond; 2.51%; 2.88%
10-Year Treasury Bond; 2.69%; 3.05%
30-Year Treasury Bond; 3.02%; 3.31%
Key Economic Statistics; Most Recent; Prior Month
National
Producer Price Index; 0.10%; 0.60%
Consumer Price Index; 0.00%; 0.30%
Unemployment Rate; 3.70%; 3.70%
ISM Manufacturing Index; 59.30; 59.80
ISM Services Index; 60.70; 61.60
Change in Non-Farm Payroll Emp.; 155,000; 237,000
New York State
Consumer Price Index - NY, NJ, CT; −0.20%; –0.10%
Unemployment Rate; 3.90%; 4.00%
NYS Index of Coincident Indicators; 5.80%; 5.80%

ISM Manufacturing PMI

According to ISM data compiled through November 2018, the manufacturing sector has rebounded from its two-month downward trend. As economies around the world slow in 2019 and full employment puts pressure on wages, the industrial sector will be under pressure to continue its growth in revenue and earnings.

Equity Market Statistics; Most Recent; Prior Month
Dow Jones Industrials; 12/31/18; 11/26/18
Dividend Yield; 2.28%; 2.32%
Price/Earnings (12 Mth Trailing); 20.85; 21.10
Price/Earnings (Projected); 16.1; 15.96
S&P 500 Index; 12/31/18; 11/26/18
Dividend Yield; 1.99%; 2.03%
Price/Earnings (12 Mth Trailing); 22.19; 22.19
Price/Earnings (Projected); 16.32; 15.87

The information herein was obtained from various sources believed to be accurate; however, Forté Capital does not guarantee its accuracy or completeness. This report was prepared for general information purposes only. Neither the information nor any opinion expressed constitutes an offer to buy or sell any securities, options, or futures contracts. Forté Capital’s Proprietary Market Risk Barometer is a summary of 30 indicators and is copyrighted by Forté Capital LLC. For further information, visit www.fortecapital.com, send a message to [email protected], or call 866-586-8100 and ask for David W. Henion, CPA, or Larry H. Rabinowitz, CPA/PFS.