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August 24 2017

Here, there, and everywhere…

Markets around the world appear to be benefitting from global economic recovery.

After pointing out the United States’ economy is the heart of the global financial system, Barron’s reported:

“The Standard & Poor’s 500 index has tirelessly amassed 30 record closes this year, but is up just 1.2 percent since March 1. Meanwhile, nearly every foreign stock market has sprinted ahead…We wrote on March 25 about how a global recovery should goose smaller, fresher bull markets abroad. By now, it is firmly becoming the consensus view – metals are rallying, with copper up 18 percent this year; the MSCI All Worlds Index has risen for eight straight months.”

Emerging markets haven’t performed too shabbily either. Through the end of last week, the MSCI Emerging Markets Index was up 22.88 percent year-to-date. Franklin Templeton’s Mark Mobius wrote improved performance in emerging markets is the result of “…encouraging economic data in China, investor inflows, and corporate earnings growth.”

So, global stock markets have been delivering relatively robust performance this year.

What have bonds been up to? They’ve gained value year-to-date, too.

Bond markets continue to tell a different story than stock markets. The Federal Reserve raised its benchmark interest rate for the third time in June. In theory, interest rates should be moving higher, yet the yield on 10-year Treasury bonds was lower (2.19 percent) at the end of last week than it was at the start of the year (2.45 percent).

Sources:
http://www.barrons.com/articles/investors-chasing-faster-growth-look-abroad-1503109144
https://www.msci.com/end-of-day-data-search
http://mobius.blog.franklintempleton.com/2017/07/13/emerging-markets-q2-2017-recap-the-streak-continues/
https://www.nytimes.com/2017/07/26/business/economy/fed-meeting-yellen-balance-sheet.html
https://finance.yahoo.com/quote/^TNX/history?period1=1483250400&period2=1503118800&interval=1d&filter=history&frequency=1d

  • Data as of 8/18/20171-WeekY-T-D1-Year3-Year5-Year10-Year
  • Standard & Poor’s 500 (Domestic Stocks)-0.0070.0830.1090.0720.1130.053
  • Dow Jones Global ex-U.S.0.315.412.50.24.8-0.1
  • 10-year Treasury Note (Yield Only)2.2NA1.52.41.84.6
  • Gold (per ounce)0.811.8-40-4.37
  • Bloomberg Commodity Index-0.6-4.9-4.1-12.7-10.4-6.4
  • DJ Equity All REIT Total Return Index0.34.1-0.87.69.56.5

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

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Bart A Zandbergen, CFP® is a Registered Investment Advisor with Optivest, Inc and a Registered Representative with Gramercy Securities, Inc. Investment advisory services are offered by Optivest, Inc. under SEC Registration and securities are offered through Gramercy Securities, Inc., member FINRA & SIPC, 3949 Old Post Road, Charlestown, RI, 02813, 800-333-7450.

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