Dear Clients and Friends:
After starting the third quarter with near double-digit gains, the market, as measured by the S&P 500 Index, has given up almost half its returns as optimism around strong earnings has faded into concerns that recent data points are pointing towards an economic slowdown. While it is normal at this stage of the recovery for the rate of improvement in economic conditions to decelerate, the market has become increasingly worried that the global growth story is losing traction and may push the U.S. economy into double-dip recession territory. The consequence has been increased volatility and a virtual investment-return whiplash as investors seek to determine the market’s direction in an economy that appears increasingly directionless.
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