October paid off once again for the optimists. Red ink was nowhere to be found among the major asset classes, as our table below shows. Even the battered REIT market posted a handsome gain last month.
What’s extraordinary here is the persistence of bull markets in everything. In fact, it’s downright amazing. On a 1-year basis, everything’s up, and the same can be said when reviewing longer term records as well. The lone case of loss shows up only in REITs in the year-to-date column. But that’s hardly a calamity, given the potent rise in the asset class for the better part of the past seven-plus years.
Meanwhile, the Federal Reserve is doing what it can to keep the bulls happy. Yesterday’s 1/4 point cut in Fed funds received a warm welcome in the stock market. The S&P 500 rallied 1.2% yesterday, reaffirming once again that the equity crowd loves liquidity.
The sentiment’s a bit more complicated in the bond market. The initial reaction to the Fed’s cut among the fixed-income set was to sell first and ask questions later. As a result, the yield on the benchmark 10-year Treasury popped by the close of yesterday’s trading, rising to 4.48%, the highest in nearly two weeks. But no one should confuse the 10-year’s yield as excessive. A 4.48% rate is roughly the lowest in the past two years.