In this month’s video, I look at key trends developing in global stock and bond markets. Chart review includes analysis of large-cap, small cap, emerging market, high yield, interest rates, and gold prices. Observations of risk and reward are noted throughout with an emphasis on caution for new money at this phase of the rally in stocks. Recorded on March 7, 2017.
The strength of broad domestic stock market indices in 2017 has been the dominating story in global financial markets. The expectation of new government policies, coupled with the lack of risk asset volatility, has many investors feeling confident in a continuation of the bullish trend.
As of last week, ETFs trading in the United States have accumulated over $75 billion in fresh capital inflows since the start of the year. The majority of that money has gone towards stock-focused index funds such as the SPDR S&P 500 ETF (SPY).
Everywhere you look now, someone has an opinion about the direction of the markets under a Trump presidency. There is speculation on everything from the impact of his trade policies to the potential of further deficit spending and legislative changes. These factors have coalesced to send many sectors of the stock and bond markets into a tizzy as investors grapple for positioning. Read more
The fear trade has been one of the most successful avenues for investors to take part in this year. Treasury bonds, gold, utilities, consumer staples, and REITs have all been a big contributor to outsized gains versus a traditional basket of diversified stocks and bonds. These sectors are well-known defensive plays that tend to perk up during periods of duress in stocks or as interest rates fall. They are also beloved by income investors as a meaningful pickup in yield versus a conventional Treasury bond or S&P 500 Index fund. Read more
If someone would have told you six months ago that silver ETFs are getting ready to soar, you would have probably laughed at them. This is the same precious metal has endured wave after wave of lower prices over the past half-decade. So much so that many investors have flat given up on the prospect of a meaningful rebound or the re-emergence of judicious inflation.
However, like so many other investments facing negative headwinds and extremely pessimistic sentiment, it found a way to disprove the masses.