The Eurozone manufacturing numbers released on Monday don’t lend themselves to optimism. U.S. equities are up 28%.
Though ETF assets in the U.S. have been growing, the most successful funds account for a majority of the assets. Currently, 47% of ETFs in the U.S. are sub-scale.
If we look at year-to-date performance through the end of November, it’s clear that investors who took on equity risk have been rewarded.
In practice, asset owners (both retail and institutional) want to avoid significant portfolio drawdowns even if the benchmark index declines.
Professional managers often observe that during times of market stress (such as in 2008), correlations between asset classes tend to converge.
The ETF industry in the U.S. has continued to see new entrants and product launches. It’s useful to assess what types of products have been launched recently.
ETF assets in the U.S. grew to $1,668 billion at the end of November 2013. The majority of ETF assets continue to be invested in core U.S. and global equity ETFs as well as bond ETFs.
Volatility in nominal growth is a major driver of unemployment and business cycles. With growth stabilizing, the stage is set for continued equities gains.
New home sales data came in for both September and October due to the government shutdown. In November, Americans purchased 444,000 new homes.
This week starts out quick with a speech by Ben Bernanke on Monday afternoon. It’s likely he’ll continue pitching the Fed’s line that tapering isn’t tightening.
The consumer discretionary sector (XLY) increased its outperformance against other S&P500 sectors with a 1.2% gain.
The S&P500 (SPY) closed Friday up 0.11% on a shortened holiday week that nonetheless contained some significant economic data.
All the action happened Wednesday, as a speech by Ben Bernanke and the release of the October FOMC minutes combined to shake up the equity and rate markets.
U.S. stocks (SPY) have been on a great run this year, and whether or not the rally continues is in the Fed’s hands.
The minutes from the October Federal Open Market Committee (FOMC) meeting were released on Wednesday.
Why should investors care about all this? Monetary policy has been THE driver of global equity performance over the last five years.
The Fed’s balance sheet has increased massively in the last five years due to the unconventional policies it has implemented.
On Friday, the Fed released its Industrial Production and Capacity Utilization report. The FOMC uses both of these metrics as inputs.
The Street is calling it “Dectaper”: What does it mean for your portfolio? It’s better for your investments to accept it rather than fight the Fed.
The signaling effect on market expectations is not the only channel through which monetary policy affects the economy.