Monthly Observations - October 2025
Monthly Observations
November 3, 2025
The S&P rose for a sixth month in a row, up 2.3% in October, which brings its year-to-date return to 16.3%. The MSCI All Country World index also rose, up 2.2% during the month, improving its year-to-date gains to 19.6%. The Bloomberg U.S. Aggregate Bond index gained 0.6% in October, which brings its year-to-date return to 6.8%.
The US and China dialed back trade tensions, and the Federal Reserve cut interest rates again, propelling the stock market to new all-time highs. Meanwhile, a private company went bankrupt amid allegations of fraud, prompting Jamie Dimon of JP Morgan to remark that “where there is one cockroach there are often many others”, reflecting increased concerns about private credit and private markets in general.
Monthly Highlights
The US and Chinese presidents agreed to reduce trade tensions between their two countries A large private company declared bankruptcy amid allegations of widespread fraud
The Federal Reserve lowered interest rates by 0.25%, for the second month in a row
News in Review
The presidents of the two largest economies in the world met to discuss a trade truce where both sides agreed to reduce tensions. The US offered to lower tariff levels and the Chinese relaxed restrictions on rare earth metals, which had threatened to limit the productions of semiconductor manufacturing, advanced weapons systems, smartphones, computers and all other technology that rely on the rare earth components. In return, the Chinese want greater access to advanced Nvidia chips.
Behind the Collapse of an Auto-Parts Giant: $2 Billion Hole and a Mysterious CEO
A mid-western company, First Brands Group, filed for bankruptcy after allegations of fraud and $2 billion went missing. The company was a serial acquirer and raised billions through off-balance-sheet financing, often by “factoring”, which is where you borrow money in anticipation of payments that your customers owe you. It appears that the company may have borrowed multiple times against the same collateral.
Federal Reserve Cuts Interest Rates Amid Weaker Labor Market
The Federal Reserve cut interest rates for a second month in a row, reducing the upper end of the Fed Funds rate from 4.25% down to 4%. The decision wasn’t unanimous – one governor didn’t want to lower rates at all and another wanted to lower interest rates by a larger amount instead. The different views on where interest rates should go are based on the tension between a weakening labor market (which would normally suggest lower rates are needed) and inflation that is continuing to run above the bank’s 2.0% target (which would normally suggest higher rates).
Passenger Loses Laptop and Forces an International Flight to Turn Around
A passenger dropped their laptop which fell into the cargo bay, and it was considered too risky to leave it there for the duration of the international flight from DC to Rome, especially because the laptop was turned on at the time. No emergency was declared, but out of an abundance of caution, they returned to the airport before resuming their flight across the ocean.
DISCLOSURES
Securities offered through LPL Financial, Member FINRA/SIPC. All investment advice is offered through Independent Advisor Alliance, LLC, a registered investment adviser. Independent Advisor Alliance, LLC is a separate entity from LPL Financial. The opinions expressed in this material do not necessarily reflect the views of LPL Financial.
This newsletter was written and produced by the Independent Advisor Alliance, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The views stated in this letter should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice.
Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.
S&P 500 INDEX: The Standard & Poor's 500 Index is an unmanaged, capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
NASDAQ 100 INDEX: The Nasdaq 100 Index is an unmanaged, capitalization-weighted index of the largest 100 non-financial stocks traded on the Nasdaq market. Unlike the S&P 500 it does not represent all major industries and may be more volatile than more broadly constructed indices.
MSCI ACWI INDEX: The MSCI ACWI captures large- and mid-cap representation across 23 developed markets (DM) and 24 emerging markets (EM) countries. With 2,495 constituents, the index covers approximately 85% of the global investable equity opportunity set.
Bloomberg U.S. Aggregate Bond Index: The Bloomberg U.S. Aggregate Bond Index is a broad-based index of the U.S. investment-grade, fixed-rate bond market, including both government-related and corporate securities and mortgage- backed and asset-backed securities.
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