Several of the positive developments delineated in our last letter have come to fruition. As a result, the stock market had an impressive rally in the 3rd quarter. While there exist understandable concerns about tariff negotiations, the current government shutdown, and somewhat elevated valuations affecting investor psychology, these worries have been offset by stronger than expected corporate earnings. Moreover, the Federal Reserve has begun the easing process, and we observe continued broadening of market leadership.
Historically, the 4th quarter of the year results in positive market returns as money on the sidelines gets committed more permanently. There is now 7.5 trillion dollars in money market vehicles. Short term rates have been coming down in recent weeks and offer less attractive alternative than earlier in the year.
