Strength in consumer stocks led markets higher last week. The S&P 500 rose 1.6%. The global MSCI ACWI increased 1.2%, and the Bloomberg BarCap Aggregate Bond Index edged 0.2% lower.
Key points for the week
- G7 summit reinforces concerns over trade.
- The Fed is likely to raise rates on Wednesday.
- Expect some positive announcements from the Trump-Kim summit.
Meetings will be a central topic for investors this week. The G7 meeting ended with acrimony as the U.S. communicated its desire for trade agreements more beneficial to U.S. firms. While much of the posturing was for the purpose of negotiation, the meeting signaled trade risks continue to increase. Our expectations remain for renegotiations to produce moderate benefits for the U.S. as many other countries have more to lose.
On Tuesday, President Trump and President Kim, of North Korea, will meet for a summit in Singapore. We do not expect a full-blown nuclear disarmament deal to be announced, but we hold out hope for some progress on lowering the number of North Korea’s weapons. Lacking astounding news on the nuclear front, an announcement officially ending the Korea war would be a positive.
The Federal Reserve meets Wednesday. As the nearby chart shows, the Fed has steadily hiked rates at its recent meetings. Most market watchers expects another hike of 25 points. More attention will be paid to the press conference language regarding the Fed’s outlook on the economy and whether it will raise rates once more or twice this year.
Source: Department of Commerce, Carson Group Partners.
Fun story of the week
The Washington Capitals won the first Stanley Cup in team history on Thursday night. As the city celebrated, the deputy mayor tweeted out a tongue-in-cheek tardy note signed by the DC government for fans to fill out and present to their employers. The note stated the employee stayed out past a reasonable hour celebrating the victory and to please excuse their lateness. The deputy mayor also added a P.S. stating the employee will be taking a sick day the following week to attend the victory parade.
This newsletter was written and produced by CWM, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.
S&P 500 INDEX
The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
MSCI ACWI INDEX
The MSCI ACWI captures large- and mid-cap representation across 23 developed markets (DM) and 23 emerging markets (EM) countries*. With 2,480 constituents, the index covers approximately 85% of the global investable equity opportunity set.
Bloomberg U.S. Aggregate Bond Index
The Bloomberg U.S. Aggregate Bond Index is an index of the U.S. investment-grade fixed-rate bond market, including both government and corporate bonds.