A string of disasters continue to take their toll on Central America and the southern part of the United States. What feels like moments after Hurricane Harvey devastated Texas, an even stronger storm, Hurricane Irma, made its way through the Caribbean this week and is on a path to make landfall in Florida. Furthermore, the strongest earthquake in a century, for the area, shook Mexico and registered up to 8.4 on the Richter scale. The European Central bank left its key interest rate unchanged at its September policy meeting while the Canadian Central Bank raised its rate for the second time this year, the first in July being the bank’s only hike in seven years.
The strength and frequency of natural disasters this week not only effected their regions physically but impacted markets as well. The S&P 500 index declined over -0.5% for the week and turned negative on a trailing 1-month basis. Small cap stocks declined by even greater lengths than large cap equities and are nearly flat for the year. Weakness of the U.S. dollar has been exaggerated by these events with the Euro hitting its highest value against a U.S. dollar in more than two years. International stock returns did not experience the same decline as domestics and fixed income investments generally had positive returns due to anxiety around the headlines.
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