INVESTMENT COMMENTARY & Outlook
October 2024
There have been a few October surprises. First, the tension in the Middle East exploded after Iran launched approximately 200 missiles into Israel that were successfully intercepted, but now the world is waiting to see how Israel will respond. Second, Florida Governor Ron DeSantis said that the damages from Hurricane Milton avoided a “worst case scenario,” despite the fact that Siesta Key, Sarasota and the Tampa baseball stadium sustained severe damage. Additionally, the economic uncertainty is also diminishing, especially in light of a recent big surge in the ISM service index. In fact, the Atlanta Fed is now predicting 3.2% annual third quarter GDP growth.
The Federal Open Market Committee (FOMC) on September 18th cut key interest rates 0.5% and the FOMC “dot plot” is now predicting two more 0.25% key interest rate cuts at the November and December FOMC meetings. Furthermore, the dot plot also predicted three more 0.25% key interest rate cuts in 2025. The only “glitch” is that Treasury yields have risen significantly since the Fed cut key interest rates on September 18th due to positive economic news as well as higher crude oil prices from the fear of escalation …