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).
http://www.barrons.com/articles/investors-chasing-faster-growth-look-abroad-1503109144 (or go to https://s3-us- west-2.amazonaws.com/peakcontent/+Peak+Commentary/08-21-17_Barrons- Investors_Chasing_Faster_Growth_Look_Abroad-Footnote_1.pdf)https://www.msci.com/end-of-day-data-search (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/08-21-17_MSCI- End_of_Day_Index_Data_Search-Footnote_2.pdf)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.htmlhttps://finance.yahoo.com/quote/^TNX/history? period1=1483250400&period2=1503118800&interval=1d&filter=history&frequency=1d (or go to https://s3-us-west- 2.amazonaws.com/peakcontent/+Peak+Commentary/08-21-17_Yahoo_Finance-10-year_Treasury_Bond_Yield- Footnote_5.pdf)