Solid returns continued in both equity and fixed income markets. The S&P 500, ACWI* and NASDAQ stock indexes accumulated returns of 2.02%, 2.17% and 2.68%, respectively, during the period. Similarly, fixed-income markets accumulated widespread gains as a result of lower interest rates.

On September 19, the Federal Reserve decided to cut its benchmark rate by 50bp to bring it to a range of 4.75-5.00%, the first downward adjustment of a new cycle that for the time being expects around 50bp and 100bp more cuts for the remainder of 2024 and end-2025, respectively.

With this first cut we see a Fed satisfied with the current levels and trajectory of inflation and now putting a greater focus on the U.S. labor market whose September report surprised investors positively; 254,000 new jobs were created during the month of September bringing the unemployment rate to 4.1% from 4.2% the previous month. Going forward, even if employment conditions weaken, real wage increases should continue to support consumer spending allowing the U.S. economy to maintain a healthy pace of growth toward 2025 in line with its long-term potential growth of around 2%. The Fed will remain attentive to such data.

Finally, with less than a month to go before the U.S. presidential elections, polls continue to show a technical tie between Trump and Harris, with the swing states of Pennsylvania, Georgia, Michigan, Arizona, Wisconsin and North Carolina defining the winner of the election. And although the agendas of both candidates differ drastically on immigration, trade, economic and foreign policy issues, at Grupo Inversión we believe that the markets will pay more attention to the makeup of the houses, hoping for a divided congress that will moderate the more radical proposals of each candidate.