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Press Room: Markets & Economy

Quarterly Market Commentary: First Quarter 2017



“The optimist sees the donut, the pessimist sees the hole,” so said eminently quotable Irish writer Oscar Wilde with respect to how people can view the same future through differing perspectives. And despite the purchase of the iconic, North Carolina-based donut-maker Krispy Kreme by German investors last year, hope is springing eternal in the U.S. On the business side, CEO confidence measures are hitting levels not seen since 2006. Also, small and mid-sized firms are increasingly encouraged about business conditions going forward. The NFIB Small Business Optimism Index stayed above 105 for three straight months, easily the best readings during this economic cycle. This compares to a long-term average of 98 and a post-financial crisis mean of just 94. Not to be left out, the American consumer’s outlook has taken a turn for the better. Consumer Confidence, as reported by The Conference Board, recently hit 125.6, the highest since late 2000.

Read the Full Commentary: 1Q 2017


The Economy: March 2017

THE ECONOMY: As of March 2017

U.S. stock markets were little changed in March with the S&P 500 up just 0.12% and the small cap Russell 2000 about the same, registering a 0.13% gain. The Federal Reserve’s interest rate increase coupled with the White House’s failure to get new healthcare legislation passed tempered investor’s enthusiasm for equities, especially after such a strong rally over the past three months. Market participants will now likely shift their attention toward potential corporate tax reform. Despite muted U.S. returns, international markets continued their ascent. International developed and emerging markets were up 2.75% and 2.52% for the month. Bond yields have been relatively range bound, with the 10 year treasury yield oscillating between 2.40% and 2.60%.

The Economy: February 2017

THE ECONOMY: As of February 2017

Historically, the first February under a new President has been a poor one for stocks. Not so this year, as post-election momentum propelled markets to fresh highs. The S&P 500, Dow Jones Industrial, and NASDAQ were up 3.97%, 5.17%, and 3.91%, respectively, for the month. Emerging market equities have been a top performer so far, up 3.06% in February and 8.70% already on the year. Bond investments had a rough end to 2016, as quickly rising interest rates led to selling of fixed rate investments. These securities have rebounded through the first two months of 2017, though, with municipal bonds up 1.45%, and high yield bonds rising 2.93%. On the docket for March is a Federal Reserve meeting in which markets forecast a better than 50% chance of another rate increase.

The Economy: January 2017

THE ECONOMY: As of January 2017

Stock markets started off on the right foot in 2017, with most major markets registering solid performance in January. The S&P 500 increased 1.90 percent, and strong technology stocks propelled the NASDAQ to a 4.35 percent gain. International markets were generally laggards in 2016, but that trend reversed this past month. The MSCI EAFE and MSCI Emerging Markets rose 2.90 percent and 5.47 percent, respectively. In fixed income markets, high yield bonds were the place to be, as they have returned 1.45 percent already this year. There were no changes to monetary policy after the most recent Federal Reserve meeting, so investors will sharpen their focus on potential governmental policy changes as the new administration settles in.

The Economy: December 2016

THE ECONOMY: As of December 2016

Despite an unfavorable start to the year, stock markets finished 2016 on a high note. The post-election stock rally continued through December, bringing the yearly return of the S&P 500 to 11.96 percent, up substantially from its low point in early February. Small cap equities fared even better, with an impressive 26.56 percent increase. International markets weren’t as robust as domestic ones, but the international and emerging markets gained 1 percent and 11.19 percent, respectively, for the year. Rising interest rates in December depressed fixed income returns, but will provide higher income going forward. In 2017, policies from both the government and the Federal Reserve are set to change course, which investors will need to monitor closely going forward.

The Economy: November 2016

THE ECONOMY: As of November 2016

Whether it was an exhilarating, come-from-behind win in extra innings that gave the Chicago Cubs their first World Series in over a century, or Donald Trump winning the Presidential election a week later, November proved full of surprises. The thrill of victory was only matched  by the heartbreak of others. But regardless of who you rooted and voted for, stock market investors should be happy with the month’s result. The S&P 500 and Dow Jones were up 3.70 percent and 5.88 percent respectively, and both hit all-time highs. Small cap stocks fared even better, with the Russell 2000 increasing a whopping 11.15 percent. Bond yields did rise quickly, leading to short-term losses for fixed income holders. However, higher interest rates will mean greater income going forward.

The Economy: October 2016

THE ECONOMY: As of October 2016

It was a relatively weak month for equities in October, as investors pared back risk in their portfolios in preperation for the U.S. Presidential elections next month. The S&P 500 was down 1.82 percent, and the small cap Russell 2000 lost 4.75 percent. Despite the poor performance, the early read on corporate earnings looks positive, with a majority of companies beating expectations. Emerging markets did net a small gain, up 0.24 percent for the month.

Quarterly Market Commentary: Fourth Quarter 2016



The best investment of the past year was not found in traditional financial markets – stocks, bonds, and the like – but rather in betting on English soccer, where a lucky few wagered on perennial laggard Leicester City to win the Premiere League title. The squad went on an improbable run, overcoming 5,000 to 1 odds to claim the championship. Here in the U.S., the Chicago Cubs won the World Series, ending a drought that had lasted over a century. Of course, gambling on sports is not recommended as part of an effective long-term investment strategy, but expecting that unexpected proved a salient theme in 2016. Over in the U.K., citizens voted to leave the European Union, despite what the majority of expert polling data would have led one to believe. Similarly, in the U.S., longshot Presidential candidate Donald Trump went on to win the election with Republicans gaining majorities in the House and Senate as well, defying most conventional prediction models.

Read the Full Commentary: 4Q 2016


The Economy: September 2016

THE ECONOMY: As of September 2016

There wasn’t much movement in equity markets during September, as investor sentiment remained subdued in the face of potential Federal Reserve action later this year and a looming U.S. election in November. However, the 3rd quarter proved to be a good one for stocks overall. Standouts included the Russell 2000 index of small cap stocks, which gained 9.05 percent, emerging markets, which were up 9.03 percent, and technology companies, which propelled the NASDAQ to a 10.02 percent increase. Interest rates moved up marginally during the quarter, but corporate bonds still managed solidly positive returns.

The Economy: August 2016

The Economy: As of August 2016

After a flurry  of volatility in June and July surrounding the “Brexit” vote, August turned out to be a relatively quiet month for stock markets. Large cap developed country equities were little changed, with S&P 500 up 0.14% and the MSCI EAFE index of international stocks gaining just 0.7%. Emerging markets, however, continued their strong run, rising 2.49%. Though they experienced a rocky start to the year, high yield corporate bonds have been one of the top performing asset classes, returning 14.35% through the end of August.