4th Quarter 2016
U.S. stock market shows impressive resilience in 2016. The year 2016 was a perfect case-in-point as to the unpredictability of geopolitical events and their short-term impact on markets. At the beginning of 2016, not a single economist or market guru predicted the stock market and oil sell-off in January, the U.K.'s vote to leave the European Union ("Brexit") in June, or the Presidential election of Donald Trump in November. If someone had predicted those events, would they have also predicted that the U.S. stock market would be up 12% for the year? Or that emerging stock markets would be up over 11%? Not likely.
3nd Quarter 2016
Election anxiety? The market looks well past November. In June, when U.K. voters approved a referendum to leave the European Union, equity markets around the world shook. Solemn pronouncements from talking heads on cable news and media coverage elicited a negative emotional response. This emotional response obscured the immediate reality of Brexit, which is nuanced; and the long-term effects are still not entirely clear.
2nd Quarter 2016
Unexpected outcomes, unexpected performance. U.K. voters approved a referendum in June to leave the European Union, an event referred to in the media as "Brexit." This was a most unexpected outcome. No country has ever left the E.U. The uncertainty surrounding this event created quite a stir in global markets. Investors sought safety in bonds around the world, and interest rates fell. Stock markets around the world also fell, quite dramatically, on the day after the vote.
1st Quarter 2016
Global stock markets recover from a rough start to 2016. There is no sugarcoating it: global equity markets were abysmal at the opening of 2016 as concern spread about the slowing pace of economic growth around the world. The S&P 500 had its eighth worst January since 1950. Oil prices cratered. Gold prices soared. Investors sought safety in the U.S. bond market. Interest rates fell. It seemed that the market bears had finally come out of hibernation. Market timers, principally hedge funds, "de-risked" their portfolios by selling stocks.
4th Quarter 2015
Stock markets volatile heading into 2016. U.S. stocks took a beating last summer and early fall. Many market prognosticators proclaimed that volatility was back for good. Hedge funds and other market timers declared that stocks were headed for more trouble. To support their thesis, they pointed to the headwinds of slow growth in China, falling commodity prices, and the Federal Reserve's desire to raise its short term target interest rate.
3rd Quarter 2015
Global stock markets fall in 3rd quarter. U.S. stocks, particularly growth-oriented stocks in the technology and biotech sectors, had been chugging along in 2015 with decent returns. Daily volatility measures of the stock market had plunged in recent years as well.
2nd Quarter 2015
Despite June Volatility, Markets Flat in 2nd Quarter
In global stock markets, the second quarter was shaping up to have decent returns through May, until – like a broken record – the crisis in Greece flared up once again, leaving equity market returns mostly flat for the quarter.
1st Quarter 2015
Strong Start to 2015 for International Markets
In recent years, the U.S. stock market has outperformed developed intrnational markets by a fairly wide margin. The economic rebound in the U.S. from the global financial crisis of 2008, while not particularly strong on its own terms, has been robust compared to countries outside the U.S. With the challenges of low economic growth, low inflation, rising public debt levels, and competing national interests, the euro zone in particular has been very slow to recover.
U.S. Stock Market Shows Resilience
At the beginning of 2014, the consensus call amongst economists was for higher inflation and higher interest rates in the U.S. as the economy recovered and as the Federal Reserve wound down its expansionary monetary policy. The consensus was wrong – and not only in the U.S. Around the world, investors and central banks drove interest rates to very low levels.