As the year draws to a close, now is a good time to revisit your financial priorities and consider what lies ahead. From preparing for potential long-term care needs and exploring year-end tax strategies to making important retirement and investment decisions, thoughtful planning can help you navigate what's next with greater confidence.
Explore this month's insights to help you make informed decisions—and let us know if we can be of any assistance.
Market Update
The U.S. stock market experienced much volatility throughout the month as investors weighed the viability of economic growth, persistent inflation, Federal Reserve policy, corporate profitability, geopolitical unrest, and the impact of potential overvaluation of equities. The result was a market characterized by focus on individual companies and sectors rather than a broad-based preference for equities in general. Renewed selling pressures and profit-taking at the end of the month dragged the NASDAQ and the S&P 500 lower as investors reacted to disappointing technology sector earnings and stubborn inflation. Tech and AI shares, which had driven the market for much of the year, experienced a larger decline compared to the broader market. Meanwhile, the Russell 2000 and the Dow outperformed.
Volatility defined the bond market in October. At the beginning of the month, inflation concerns, expectations for Federal Reserve rate increases, and uncertainty surrounding the economic outlook drove long-term Treasury yields higher. Bond yields remain well above their 2025 year-end values as inflation concerns remain prevalent.
Inflation remained one of the most important challenges confronting the economy during October. The latest personal consumption expenditures (PCE) price index along with the Consumer Price Index (CPI) showed that inflation rose for the month and for the year. Rising energy prices were a major contributor to overall price increases, as geopolitical tensions in the Middle East contributed to uncertainty surrounding energy supplies and transportation costs. Nevertheless both goods and services experienced inflationary pressures evidenced by an increase in core (excluding food and energy) prices for the month and year.
The U.S. economy in October showed strength. The advance estimate of gross domestic product (GDP) showed the economy accelerated. This growth was encouraging as it came in the face of rising inflation, elevated interest rates, geopolitical uncertainty, and higher energy costs. Consumer spending rose, technology-related expenditures strengthened business investment, and government expenditures increased. While the economy expanded, caution about future growth is pertinent. For instance, consumer spending, while growing, was attributable, in part, to rising prices and inflationary pressures, which could ultimately constrain household purchasing power. Business investment was focused primarily in technology and AI sectors, which face concerns about overvaluation and sustainability.
International Markets
European equity markets reflected guarded optimism that the economy was improving, influenced by corporate earnings, inflationary pressures, and global unrest. October ultimately saw European stocks have their strongest month since June. Asian stock markets didn't fare quite so well in October. As overvaluation concerns around tech shares grew, volatility increased, prompting profit-taking, resulting in a drop in stock market values. By the end of October, the STOXX Europe 600 Index rebounded from the previous month, closing up 2.5% for the month; the United Kingdom's FTSE rose 2.6%; Japan's Nikkei 225 Index declined 7.4%; and China's Shanghai Composite Index dropped 6.3%.
On a Personal Note
Jeff played a little extra golf to take advantage of the exceptionally nice weather before the local season comes to an end. Drew and his family saw Ed Sheeran perform in Indianapolis. Everyone was together for fall break so it was great to have a mini-vacation and then back home the very next day. Chris’s daughters wrapped up the fall soccer season and the football/cheer season. Now it is on to the late fall and winter activities. Lisa’s family had an engagement party for Savana and Tristan. David and Tristan were up bright and early at 5:00am smoking the pig for the barbeque – now that’s dedication! It turned out to be a beautiful fall day filled with family, friends, lots of laughs, and plenty of good food. Wedding plans are moving right along for next June, and the countdown is officially on! October was a wedding filled month for Sam. It was a great to celebrate such special moments with his friends and family. Taylor was in the wedding of a dear friend she met in middle school. It was an honor to celebrate the couple and get to stand by the bride’s side on her special day!
