The ball is now is Congress’s court as President Trump announced that he will not approve insurer subsidy payments and will not certify Iran’s compliance with the 2015 nuclear agreement. Regarding both matters, the president indicated that Congress should act to find better solutions than what is currently in place. While the released Fed meeting minutes affirmed the likelihood of a rate increase in December, core inflation was light in September – potentially influenced by the hurricane disruptions during the month. In Europe, Brexit talks calmly continue and the European Central Bank publicly discussed stimulus reductions as the healthier economic environment persists.
U.S. large cap stocks marched steadily on last week as earnings season kicked off. Small cap domestic stocks took a breather and ended the week down after bouncing back strongly from mid-August lows. International stocks continued their ascent and while the year-to-date returns are stunning, there is still a large gap to close versus their U.S. counterparts. Bond prices, which move inversely to yields, rebounded as the core inflation news pushed rates down on Friday. The 10 year Treasury, which hit a high of 2.38%, closed the week at 2.28%. Battered commodity prices had a good week with increases in both energy and gold prices.