MARKET COMMENTARY | October 2017
Stocks rose amid a brighter outlook for the global economy and better-than-expected corporate earnings. Several key market indexes reached record highs during the quarter, despite increasing tensions with North Korea and the start of a particularly destructive hurricane season. European stocks and emerging markets outpaced U.S. equities.
Economically sensitive stocks generally provided stronger returns than defensive sectors. Information technology, energy and materials stocks led markets higher. Financial stocks also advanced on expectations for rising global interest rates. The consumer staples sector fell, weighed down by a sharp decline in the shares of tobacco companies.
MARKET COMMENTARY | September 2017
Global stocks finished August roughly where they started as investor optimism over improving world economic growth was tempered by rising geopolitical risk. Developed markets in the U.S., Europe and Japan moved sideways as tensions rose over international disputes with Russia and North Korea. In contrast, emerging markets stocks rose on stronger metals prices and a weaker dollar.
Information technology and utilities stocks enjoyed the best gains, supported by strong corporate earnings growth. Energy stocks declined the most, weighed down by falling oil prices amid over-supply concerns. Financial stocks also fell as many investors appeared to take profits from what had been the highest returning sector in developed markets since the November U.S. elections.
MARKET COMMENTARY | August 2017
Global stocks posted modest gains amid healthy corporate earnings reports and an improving outlook for global economic growth. U.S. stocks hit a series of new record highs and European equities enjoyed significant inflows. A weakening dollar and rising commodities prices supported a strong rally in emerging markets.
Telecommunication services and basic materials stocks led markets higher, supported by signs of a broad-based recovery in the global economy. Information technology stocks also rallied on solid earnings growth from tech giants Apple, Facebook and Microsoft. Health care and consumer staples stocks lagged the overall market.
MARKET COMMENTARY | July 2017
Global stocks advanced amid accelerating economic growth in the U.S. and Europe, coupled with signs of diminishing political risk in the euro zone. Investor sentiment improved markedly as political newcomer Emmanuel Macron defeated Marine Le Pen in the French presidential election, largely erasing concerns that France may attempt to leave the European Union.
Health care stocks experienced strong returns as the U.S. Senate proposed a new industry-friendly plan to reform the nation’s health care system. Emerging markets also rallied amid improving global economic data and a weaker dollar. Energy stocks declined sharply, hurt by persistent oversupply concerns that continued to drive oil prices lower.
INVESTMENT INSIGHTS | July 2017
For the first time in years, the world’s major economies all appear to be on the road to recovery. This shift is creating opportunities for investors to rebalance their portfolios to take advantage of new opportunities overseas as well as in the bond market.
Download our 2017 Midyear Outlook for an in-depth look at how economic momentum is building across the globe amid political uncertainty. Our research pinpoints unique opportunities in non-U.S. markets as the macroeconomic backdrop is positive for global growth. There are also ways to position fixed income portfolios as interest rates are likely to remain lower for longer in the U.S.
Highlighted below are some of the key insights from our Midyear Outlook.
MARKET COMMENTARY | June 2017
Global stocks rose amid signs of improving economic growth and healthy corporate earnings. Several key indexes hit record highs as pro-European Union candidate Emmanuel Macron won the French presidential election. However, persistent questions about political stability in the U.S., Europe and elsewhere tempered those gains.
Information technology stocks led markets higher, supported by surging share prices for U.S. tech giants Apple and Google parent, Alphabet. The utilities sector rallied amid rising demand for dividend-paying stocks. Emerging markets stocks also advanced, despite a brewing political scandal that sent Brazilian markets tumbling.
MARKET COMMENTARY | May 2017
Global stocks rose modestly, supported by improving world economic growth and diminishing political risk. Investors cheered better economic data in the U.S., while breathing a sigh of relief over the results of the first round of France’s presidential election. French stocks rallied on poll results showing that a centrist, pro-European candidate is likely to win the May 7 runoff election.
Cyclical stocks generally outpaced defensive areas of the market, led by gains in the industrials and consumer discretionary sectors. Information technology stocks also moved higher amid strong earnings reports from bellwether tech companies. Energy stocks declined, following oil prices lower for the month.
MARKET COMMENTARY | April 2017
Global stocks rallied amid strong corporate earnings growth and improving economic data in the United States, Europe and Japan. Several key market indexes hit a series of new highs, fueled by expectations that newly elected U.S. President Donald Trump would deliver business-friendly policies, including tax cuts and regulatory reductions.
Economically sensitive stocks led markets higher, highlighted by a 12% gain in the information technology sector. Health care stocks rose sharply as U.S. lawmakers failed to repeal the Affordable Care Act, reducing uncertainty surrounding the legislative overhaul. Emerging markets stocks also rallied on brighter prospects for China’s economy.
MARKET COMMENTARY | February 2017
Global stocks rose modestly, supported by strong corporate earnings and signs of improving economic growth in the U.S., Europe and Japan. Gains were tempered by political uncertainty around the world, including investor worries about upcoming elections in Germany and France. Emerging markets enjoyed the best returns, boosted in part by higher prices for raw materials.
Economically sensitive sectors generally outpaced defensive stocks, underscored by significant gains in the information technology and materials sectors. Consumer discretionary stocks also advanced amid healthy growth in inflation and consumer spending. Energy stocks declined as oil prices slipped on reports of a substantial rise in U.S. crude oil inventories.
MARKET COMMENTARY | January 2017
In a year marked by volatility and political upheaval, global stocks rallied on signs of improving U.S. economic growth and aggressive central bank stimulus measures around the world. U.S. stocks led developed markets higher, particularly late in the year as investors cheered Donald Trump’s unexpected victory over Hillary Clinton in the U.S. presidential election. Emerging markets also enjoyed strong returns, supported by rising commodity prices and political reform efforts.
MARKET COMMENTARY | January 2017
Global stocks ended the year on a high note, boosted by investor enthusiasm for U.S. political change and expectations for an improving world economy. U.S. stocks drove markets higher even as a strong dollar threatened to weigh on corporate earnings. Financial stocks soared as the Federal Reserve raised interest rates for just the second time in a decade. High-grade bonds declined and the dollar rallied against the euro, the yen and most other currencies.
MARKET COMMENTARY | December 2016
Global stocks rose amid market optimism for Donald Trump’s ascendancy to the U.S. presidency and signs of accelerating U.S. economic growth. Several key indexes hit record highs on expectations of market-friendly policies under the new administration. Financial stocks rallied as global interest rates moved higher. Bonds fell sharply and the dollar advanced against the euro, the yen and most other currencies.
INVESTMENT INSIGHTS | October 2016
Consumer spending, long a driver of the global economy, is undergoing sweeping change. Whether it’s housing for millennials or health care for baby boomers, a significant shift in the way people spend money is underway in both advanced economies and the developing world.
MARKET COMMENTARY | October 2016
Global stocks declined modestly as signs of improvement in the U.S. economy raised investor concerns about higher interest rates. Health care stocks fell sharply amid ongoing drug pricing pressures and disappointing earnings reports, while the financial sector rallied on the outlook for rising rates. High-grade bonds lost ground and the U.S. dollar advanced against the euro, the yen and most other currencies.
MARKET COMMENTARY | September 2016
Stocks rebounded amid signs of stabilization in the global economy, strong earnings at bellwether companies and ongoing central bank stimulus measures. A “risk on” rally characterized the July-to-September period, following a highly volatile second quarter. Technology and materials stocks led markets higher, while the utilities and telecommunication services sectors declined. High-grade bonds advanced and the U.S. dollar fell against the euro and the yen.
MARKET COMMENTARY | August 2016
Stocks finished the month essentially flat as signs of an improving global economy were offset by investor concerns about higher U.S. interest rates. Information technology and financial stocks enjoyed the biggest gains while the utilities and health care sectors lost ground. High-quality bonds also declined as the Federal Reserve hinted at a rate hike this year. The dollar rose modestly against the euro, the yen and most other currencies.
INVESTMENT INSIGHTS | February 2016 | FEATURING Mark A. Brett
- The U.S. dollar’s five-year-long bull run may be coming to an end, particularly relative to major currencies such as the euro and the yen.
- The headwind of a strong dollar should diminish for global and international stock portfolios.
- Interest rate differentials and exchange rates do not always move in lockstep, so the Federal Reserve’s rate decisions won’t necessarily dictate what’s next for the dollar.
- China’s apparent commitment to continue to devalue its currency is expected to cast a shadow over currencies in Asia and several other emerging markets.
- As emerging economies adjust to weaker global industrial activity and Chinese growth that is slower and less commodity-intensive, some currencies may continue to weaken — but there are bright spots.