June 23, 2017

For the week ending 23 June 2017

  • Crude oil prices decline more than 20% from recent peaks
  • Brexit negotiations begin
  • BOE governor, economist split over rate moves
  • MSCI admits China’s A shares
  • Fed’s Powell OK with relaxing Volcker rule

 

Global equities slipped this week, but not before the S&P 500 Index posted a fresh record high early in the week. Falling oil prices have been a cause for investor concern. West Texas Intermediate crude continued its decline, slipping to $42.65 a barrel on Friday from $44.70 a week ago, trading near a seven-month low. The yield on the US 10-year Treasury note was virtually unchanged, while volatility, as measured by the Chicago Board Options Exchange Volatility Index (VIX), declined slightly to 10.6 from last Friday’s 10.9. 

June 23, 2017

For the week ending 23 June 2017

  • Crude oil prices decline more than 20% from recent peaks
  • Brexit negotiations begin
  • BOE governor, economist split over rate moves
  • MSCI admits China’s A shares
  • Fed’s Powell OK with relaxing Volcker rule

 

Global equities slipped this week, but not before the S&P 500 Index posted a fresh record high early in the week. Falling oil prices have been a cause for investor concern. West Texas Intermediate crude continued its decline, slipping to $42.65 a barrel on Friday from $44.70 a week ago, trading near a seven-month low. The yield on the US 10-year Treasury note was virtually unchanged, while volatility, as measured by the Chicago Board Options Exchange Volatility Index (VIX), declined slightly to 10.6 from last Friday’s 10.9. 

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James T. Swanson, CFA

Chief Investment Strategist

James Swanson, CFA, is an investment officer and chief investment strategist of MFS Investment Management® (MFS®). He is also a fixed income portfolio manager. 

James offers his insights and perspective on the markets and the economy to MFS clients around the world through in-person meetings, his Strategist's Corner online column and a blog launched in 2011. He is a frequent guest commentator on the markets on CNBC, Fox Business and Bloomberg Television and is often quoted in leading national and financial publications, including the Wall Street Journal, the New York Times, the Los Angeles Times and Investor's Business Daily. James joined MFS in 1985. He was named fixed income strategist in 2001 and chief investment strategist in 2004. 

He is a graduate of Colgate University and the Harvard Business School. James holds the Chartered Financial Analyst designation.

June 2017

by James T. Swanson, CFA, Chief Investment Strategist

In the months following the 2016 US presidential election, US stock and bond markets moved inversely, both anticipating a pickup in economic growth. Equities rose smartly while bond prices fell, pushing yields higher, anticipating that faster growth would eventually lead to an uptick in inflation. But in the last few months, the stock and bond markets have begun to tell very different tales. Stocks have moved up unblinkingly, and bond prices have moved up as well, driving yields lower. The bond market is telling a story of lower growth and lower inflation ahead. But no one’s told this slowdown story to the stock market. It assumes nothing has changed.

by James T. Swanson, CFA, Chief Investment Strategist

In the months following the 2016 US presidential election, US stock and bond markets moved inversely, both anticipating a pickup in economic growth. Equities rose smartly while bond prices fell, pushing yields higher, anticipating that faster growth would eventually lead to an uptick in inflation. But in the last few months, the stock and bond markets have begun to tell very different tales. Stocks have moved up unblinkingly, and bond prices have moved up as well, driving yields lower. The bond market is telling a story of lower growth and lower inflation ahead. But no one’s told this slowdown story to the stock market. It assumes nothing has changed.

June 16, 2017

For the week ending 16 June 2017

  • FOMC raises policy target range 25 basis points to 1% - 1.25%
  • Macron’s party likely to secure majority
  • Moody’s: UK election result credit negative
  • IMF raises China forecast, says deep reforms needed
     

Global equities are virtually unchanged on the week, but that didn’t stop the Dow Jones Industrial Average from setting a record high at midweek. The yield on the US 10-year Treasury note fell 4 basis points from week-ago levels to 2.16% while the price of West Texas Intermediate crude oil declined to $44.70 from $45.50 last Friday. Volatility, as measured by the Chicago Board Options Exchange Volatility Index (VIX), edged up to 10.9 from 10.0 a week ago. 

For the week ending 16 June 2017

  • FOMC raises policy target range 25 basis points to 1% - 1.25%
  • Macron’s party likely to secure majority
  • Moody’s: UK election result credit negative
  • IMF raises China forecast, says deep reforms needed
     

Global equities are virtually unchanged on the week, but that didn’t stop the Dow Jones Industrial Average from setting a record high at midweek. The yield on the US 10-year Treasury note fell 4 basis points from week-ago levels to 2.16% while the price of West Texas Intermediate crude oil declined to $44.70 from $45.50 last Friday. Volatility, as measured by the Chicago Board Options Exchange Volatility Index (VIX), edged up to 10.9 from 10.0 a week ago. 

June 9, 2017

For the week ending 9 June 2017

  • UK vote muddles Brexit process
  • ECB drops possibility of lower rates
  • Comey testifies on Russia probe
  • Eurozone maintains faster growth
     

“Super Thursday” started uneventfully relative to expectations, but the British election outcome changed all that. The day began with the European Central Bank meeting, followed by ex-FBI director Comey’s testimony later in the day. It wound up with the Conservative Party losing its majority in the House of Commons. Prior to the news from the United Kingdom, the Dow Jones Industrial Average closed at a record high Thursday, despite Comey’s unsettling testimony regarding private meetings with US president Donald Trump. Despite increased uncertainty surrounding the Brexit process, global equities have shown little net change on the week. The yield on the US 10-year Treasury note rose three basis points to 2.20% while West Texas Intermediate crude extended its drop to $45.50 from $47.35 a week ago after a forecast from the Energy Information Agency projected that US domestic oil output will top 10 million barrels a day in 2018. Equity volatility, as measured by the Chicago Board Options Exchange Volatility Index (VIX), remained historically muted, virtually unchanged at 10.

For the week ending 9 June 2017

  • UK vote muddles Brexit process
  • ECB drops possibility of lower rates
  • Comey testifies on Russia probe
  • Eurozone maintains faster growth
     

“Super Thursday” started uneventfully relative to expectations, but the British election outcome changed all that. The day began with the European Central Bank meeting, followed by ex-FBI director Comey’s testimony later in the day. It wound up with the Conservative Party losing its majority in the House of Commons. Prior to the news from the United Kingdom, the Dow Jones Industrial Average closed at a record high Thursday, despite Comey’s unsettling testimony regarding private meetings with US president Donald Trump. Despite increased uncertainty surrounding the Brexit process, global equities have shown little net change on the week. The yield on the US 10-year Treasury note rose three basis points to 2.20% while West Texas Intermediate crude extended its drop to $45.50 from $47.35 a week ago after a forecast from the Energy Information Agency projected that US domestic oil output will top 10 million barrels a day in 2018. Equity volatility, as measured by the Chicago Board Options Exchange Volatility Index (VIX), remained historically muted, virtually unchanged at 10.

June 2, 2017

For the week ending 2 June 2017

  • US nonfarm payrolls rose 138,000; March/April revised down
  • Merkel: We have to fight for our own future ourselves
  • Draghi suggests no immediate policy shift ahead
  • UK polls show narrower lead for Conservatives
  • US quits Paris agreement

 

Led by the United States, global equities extended gains this week amid moderate global growth and restrained inflation data. All three major US indices set all-time highs. After disappointing US employment data, the yield on the 10-year Treasury note slipped to 2.17% compared with 2.24% last Friday. Oil continued its drop as well, with West Texas Intermediate crude falling to $47.35 a barrel from $48.95 a week ago. Volatility, as measured by the Chicago Board Options Exchange Volatility Index (VIX), remained historically muted, falling to 9.9 from 10.8 last week. 

For the week ending 2 June 2017

  • US nonfarm payrolls rose 138,000; March/April revised down
  • Merkel: We have to fight for our own future ourselves
  • Draghi suggests no immediate policy shift ahead
  • UK polls show narrower lead for Conservatives
  • US quits Paris agreement

 

Led by the United States, global equities extended gains this week amid moderate global growth and restrained inflation data. All three major US indices set all-time highs. After disappointing US employment data, the yield on the 10-year Treasury note slipped to 2.17% compared with 2.24% last Friday. Oil continued its drop as well, with West Texas Intermediate crude falling to $47.35 a barrel from $48.95 a week ago. Volatility, as measured by the Chicago Board Options Exchange Volatility Index (VIX), remained historically muted, falling to 9.9 from 10.8 last week.