Weekly Market Commentary June 12, 2017

Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

Geopolitics took center stage this week. The diplomatic crisis in Qatar, a terror attack in London, parliamentary elections in the United Kingdom, and former FBI director James Comey’s testimony all moved investment prices. Global markets weathered the barrage fairly well. The S&P 500 fell 0.3%. The MSCI All Country World Index slid 0.5% and the Bloomberg BarCap U.S. Aggregate Bond Index edged 0.2% lower.

Some markets experienced particularly wide swings on the news. The MSCI Qatar Index, which is designed to measure the performance of the large and mid-cap segments of the Qatari market  declined more than 8%. In the U.K., the snap elections resulted in a hung parliament, adding more chaos to Britain’s Brexit negotiation. The British Pound moved sharply lower on the unexpected result. On the other hand, James Comey’s testimony was interpreted as a positive for President Trump and some U.S. sectors rallied on resurgent hopes of tax and regulatory reform. Financial stocks and small caps rallied during the week and technology stocks experienced a sharp sell off on Friday, as some investors took profits in this year’s stronger performing sector.

Oil prices have been volatile, reacting to the rift in the Middle East and the sudden spike in U.S. inventories this week. While oil prices have dipped, demand for skilled workers remains high and difficulty in finding qualified workers is curtailing some firm’s growth plans.


What are we reading?

Below are some areas of the market we paid particularly close attention to this week. For further information, we encourage our readers to follow the links:

Oil market reeling as Saudi Arabia slashes ties with Qatar

Saudi Arabia’s diplomatic shift towards Qatar is generating headlines as well as volatility in oil prices. Crude prices have already been under pressure amid concerns that an extension of OPEC’s cuts may not be enough to clear the supply glut given the expanding U.S. output. The current crisis represents a challenge for the US. Both Saudi Arabia and Qatar are US allies and contain key US bases.

U.S. job openings hit record high; skills mismatch rising

US job markets are tightening with a record 6 million jobs open at the end of April. However, the data underscore the difficulty employers may be facing in finding qualified applicants. A shortage of workers can restrain growth or increase inflationary pressures. When the labor market becomes too tight there is more cause for the Fed to increase rates.

What is a hung parliament — and what happens next now that the U.K has one?

British Prime Minister Theresa May failed to win a parliamentary majority in the U.K. election. She called the elections with the hope of strengthening her support ahead of Brexit negotiations, but now is forced to find a collation partner and shore up support in her own party to remain in office.


Fun Story of the Week

Anybody want to buy a bank? Santander Buys Banco Popular for One Euro

Banco Popular, a mid-sized Spanish lender was put up for auction this week when depositors drained the bank of too many assets and it was forced to be sold. Banco Santander, the third largest bank in Spain with operations across Europe, was the only bank who bid. They bid €1 or about $1.13. Please note that they didn’t bid €1 per share, but €1 for the whole bank. Before you think you could have bid €2 and have become the proud owner of Spanish bank, keep in mind that Santander will also be raising €7 billion in order to cleanup Banco Popular’s €37 billion in foreclosures and other nonperforming assets. Maybe they didn’t get it so cheap after all.


Share:
facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.
Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

RECENT POSTS

Market Commentary: S&P Decline Continues While Consumer Demand Keeps Climbing

The S&P 500 continued its string of negative weeks, dropping 3% last week. It was the seventh straight weekly decline in the index of large-cap stocks. The S&P 500 temporarily fell more than 20% on Friday, but the market rallied and the index finished down 18.1% from its January all …

Market Commentary: S&P 500 Decline Continues, But Inflation Shows Signs of Leveling Off

Market volatility continues to make life challenging for investors. The S&P 500 declined for the sixth straight week, the longest streak since 2011. Six-week losing streaks used to be much more common. The S&P 500 declined at least six consecutive weeks six different times from 2000 to 2011.

Special Market Commentary: What’s Stressing Out Stocks? These Market Inflection Points

So far, 2022 is faring to have one of the worst ever starts for stock returns. Only 1932 and 1939 have proven to be more difficult through the first four calendar months. The reasons are numerous and front-of-mind for us all: an unexpected war in Ukraine, the lingering impacts of COVID-19, …

Market Commentary: U.S. and U.K. Central Banks Offer Contradictory Outlooks, Making for a Rollercoaster Market Week

Market volatility surged last week, although the end result for the S&P 500 was a decline of only 0.2%. Central banks were the main culprits for the volatility. On Wednesday, the Federal Reserve announced it would raise rates 0.5% and clarified plans on how it will shrink its balance sh …
1 2 3 66 67 68

Get in Touch

In just 15 minutes we can get to know your situation, then connect you with an advisor committed to helping you pursue true wealth.

Schedule a Consultation

TweetsFollow Us