A Macro View — September Monthly Recap
In Memoriam - Jud Bergman
Chairman and Chief Executive Officer
Today, we remember Jud Bergman, our Chairman and Chief Executive Officer.Jud founded Envestnet in 1999 on the premise that technology would change the financial advisor industry, and was known as a pioneer in fintech.However, Jud, along with Envestnet’sother founders, had roots in asset management.
One of Envestnet’sfirst acquisitions was Denver-based Portfolio Management Consultants (PMC) in 2001, which helped launch our growth in the asset management space and beyond.Jud’s vision propelled PMC’s expansion into offering a full range of solutions and services that help advisors deliver unified advice —so their clients can achieve financial wellness. We are committed to carrying out Jud’s vision, and we will continue to broaden our offerings and support a vast network of advisors.
PMC is proud to have been under Jud’s leadership these last 20 years.Together, we have worked alongside advisors like you to help your clients achieve their financial goals.Jud was a remarkable leader whose vision, understanding and drive built the foundation for Envestnet to be the company we are today. We believe the foundation he laid will continue to improve the lives of millions of investors through you, the advisor.
Jud’s vision will forever be the foundation of Envestnet.Thank you, Jud. We will miss you.
Chart of the Week
- The Institute of Supply Management’s (ISM) manufacturing data for the month of September fell 1.30 points to 47.80% and was the lowest since 2009. This further increased the probability to 81% for a quarter-point rate cut when the Federal Reserve (the Fed) meets in October. Later in the week ISM also released the service numbers, which followed a similar trend and recorded the lowest figures since August 2016.
- The much-awaited Employment Situation Report was released on Friday, and the data did not disappoint, as the unemployment rate fell to a 50-year low of 3.50%. Nonfarm payrolls rose by a net 136,000 last month from an upwardly revised 168,000 in August. However, wage growth slowed to an annual pace of 2.90%, down from 3.20% in August.
- For the third consecutive week, the Fed has been injecting liquidity into the repo market. This comes on the back of short-term rates shooting up as high as 10% earlier this month. This action brings the overall Fed balance sheet assets closer to the $4 trillion mark at $3.95 trillion as of October 2, its highest level since March 2019.
- US equities began the week on a disappointing note on concerns of an economic slowdown, with all broad-level indices in negative territory. However, markets rebounded later in the week in anticipation of employment figures being released. Additionally, large caps outperformed small caps; growth outperformed value; domestic stocks outperformed international stocks; and emerging markets outperformed developed markets.
- Flight to quality was evident in the fixed income markets earlier last week, as the yield on the 2-Year U.S. Treasury Note, which is highly sensitive to the outlook for Fed policy, fell to 1.38%, its lowest level since 2017. The 10-year Treasury yield declined to 1.53%, while the 30-year Treasury yield tumbled to 2.05% in the aftermath of weak manufacturing data.
- Oil prices declined throughout the week on news of an unexpected rise in US crude supplies and concerns about overall global demand. The weak economic data led to a rally in gold but hit a roadblock later in the week after optimistic employment figures were released.
- US Dollar Index traded lower during the week, after scaling a 30-day high on October 1. Since then, it drifted down, as investors lowered their expectations for the Fed to cut rates after Friday’s jobs report.