Three main US stock indices end September on a positive note

Indices of major exchanges in the U.S. and Canada closed up at the end of September. Several new highs were reached during the month on U.S. exchanges.

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(September 30)In the U.S., the S& P 500, the Nasdaq Composite and the Russell 2000 all posted record highs on Friday. The S & P 500 closed up 9.30 points or 0.4 percent. This was its 39th record this year. It gained 0.7 percent over the week and 1.9 percent over the entire month of September. Since July it has risen 3.9 percent. It has risen now for eight consecutive quarters.

The Nasdaq rose 42.51 percent or 0.7 percent to 6,495.96. For the week it was up 1.1 percent and for the month just 1 percent but its quarterly gain was 5.8 percent. Its close was another record its 50th this year.

The Dow Jones Industrial Average(DJI) rose 23.89 points or 0.1 percent to 22,405.9 just missing a new record by about seven points. Over the week the index rose only a marginal 0.3 percent but over the month it gained 2.1 percent and a significant 4.9 percent over the quarter. The Russell 2000 also closed at a record high for the 21st time this year at 1490.86. It was up 2.08 points or 0.1 percent. It was up 2.8 percent over the week, 6.1 percent over the month, and 5.4 percent over the quarter. The index is of small-cap companies.

Correction time?

Some analysts think that the market may be due or even overdue for a correction. Sean Lynch of the Wells Fargo Investment Institute said: “The fundamental headlines in terms of market weakness don’t seem to be there right now, but valuations look a little stretched and investors may take a pause from the momentum we’ve been seeing... The initial move so far this year has been on pretty good earnings and pretty good fundamentals. However, a lot of stocks have had great runs and look very expensive now.”

He predicted that the S & P 500 could retreat as much as five or six percent over the rest of 2017 before rebounding in 2018. He said small-cap companies were especially risky. Buying interest appeared somewhat subdued on Friday, as most stocks moved a bit higher at the end of the month. Fox news claims that the U.S. dollar is set to break its six-month losing streak.

Trump pushes tax reform

The week was marked by President Trump's announcement of his pro-business tax reform, but it remains to be seen if it can be passed through Congress. Personal income showed an increase of 0.2 percent in August and consumer spending rose a modest 0.1 percent. There may be another increase in interest rates in December. Federal Reserve Chairwoman Janet Yellen's term ends in February. President Trump has interviewed several people for the job and could make a decision in the next two or three weeks.

North of the border

Canada's main index, the TSX, also ended the month quite positively as it reached a four-month high on Friday. It posted a 2.8 percent gain for the entire month of September. Phone-maker BlackBerry's gains helped boost the index. For the quarter the index gained three percent. Its September performance was the best since July of 2016. Rising crude oil prices helped energy shares. Bond yields increased as the Bank of Canada raised interest rates for a second time and there are signs that rates may increase in the U.S. soon as well .

Sid Mokhtari of CIBC World Markets said: "A lot of [portfolio] managers want to show that they have good exposure to areas that have worked and are paying good dividends." The TSX closed up 16.69 points or 0.11 percent at 15,634.94. This was its highest close since back on May 8 this year. Canada's GDP was unchanged from last month after eight consecutive months of growth.