This will be another short post as I am giving a talk this morning on . . . wait for it . . . inflation! The whole thesis of the talk is that inflation is going to roll over shortly, for a bunch of reasons that I will describe in future posts. Or so I hope, anyway.

This will be a short post, partially because I am in San Diego at Commonwealth’s National Conference, but mostly because there isn’t much to say about the midterms that I did not already cover the other day.

October showed a sharp rebound after a significant September drop. The S&P 500 gained 8.1 percent during the month, while the Nasdaq rose 3.94 percent. The Dow Jones Industrial Average (DJIA) experienced the best month of the three major indices, soaring 14.07 percent. Internationally, the news was mixed, with developed markets up 5.38 percent while emerging markets were down 3.09 percent. It was a surprisingly good result, especially after a terrible September.

As I have been saying for some time, the best indicator for the economy as a whole is the jobs market. With consumer spending representing more than two-thirds of the economy, as long as people are working, they can spend. And the jobs numbers tell us whether they are working.

One of the questions I have been getting recently is about the effect of the midterm elections on markets. This is normal. In fact, given the level of partisan rancor—and the number of ads I’ve been seeing on TV—it is surprising that there isn’t more concern around the elections. But with voting just a couple of days away, let’s consider what the elections could mean for our investments.

This will be the second blog post that's come out of my efforts to try to finish my talk for Commonwealth’s National conference. If you remember, in the previous post, the question was whether we were headed back to the 1970s, with all that implies (inflation, stagflation, high unemployment, disco), or back to the 1950s (which, for all its faults, did not have disco).

I am working on my presentation for Commonwealth’s National conference in a couple of weeks (yes, I am late), but I have to admit I am having some trouble telling the story. Over the past several years, I have taken whatever the hot topic of the day was—whether it was globalization, low interest rates, or the pandemic—and tried to put it in a larger context. In other words, to take something fairly isolated as a problem and tie it to everything else as a means of understanding what was likely to happen over the next five years or so. Looking back, I did a pretty good job.

My colleague Sam Millette, manager, fixed income on Commonwealth’s Investment Management and Research team, helped me put together this month’s Market Risk Update. Thanks for the assist, Sam! Let’s take a closer look.

At this point in the year, I really spend some time thinking about what the future holds for the markets and economy. Yes, of course, that is my full-time job. But for most of the year, “the future” consists of the next month or so, the next quarter at most. People need to understand what is happening now and what that means for the next couple of weeks. So, that is what I focus on most of the time. You can see that in this blog and in my monthly market and economic risk updates and videos. What commands the most attention is the now.