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Happening now: News of the weekend drone attack on a Saudi Arabia oil facility sent crude oil futures to their biggest rise ever. At the open of trading today (Monday), WTI crude is up 10% to $60.30 per barrel. Stocks fell, and bond prices rose, with the 10-year Treasury yield falling 6 basis points (bps) to 1.84%. The attack knocked out about 5% of world oil supplies. The estimated 5.7 million barrels a day of lost production is the single biggest disruption on record, according to Bloomberg.

Overview: Stocks rallied across the globe last week, as U.S.-China trade tensions lessened ahead of scheduled meetings in October. Both sides displayed goodwill gestures, as the U.S. delayed tariffs on $250 billion of goods, and China exempted several key U.S. imports from tariffs. Global stocks led the way, with both international (MSCI EAFE) and emerging markets (MSCI EM) up about 2%, with the S&P 500 index up about 1% for the week. U.S. Treasury yields rose as risk sentiment improved. U.S. 2-Year and 10-Year Treasury yields ended the week higher at 1.80% and 1.90% respectively. Through Friday, Sept. 13, the U.S. 10-year Treasury is now 40 bps higher for the month, up from 1.50% at the start of September.

Looking Ahead: Markets will be fixated on the world’s response to the Saudi oil attacks, and watching for signs of when production can be restored. The economic highlight will be the Federal Reserve meeting of Sept. 17-18, where the Fed is expected to cut the funds rate by 25 bps. Investors will be looking for direction from the Federal Open Market Committee forecasts following the announcement. Special attention will be paid to the 1:30 p.m. CDT press conference given by Chair Jerome Powell at the conclusion of the 2-day meeting.

This communication is for informational purposes only. It is not intended as investment advice or an offer or solicitation for the purchase or sale of any financial instrument.

Indices are unmanaged, represent past performance, do not incur fees or expenses, and cannot be invested into directly. Past performance is no guarantee of future results. 8954851