Stocks bounced back last week after two weeks of declines. The S&P 500 rose 0.9% and is poised to deliver its 11th month of positive performance this year. The MSCI ACWI climbed 1.0%. Bonds rose as the Bloomberg BarCap Aggregate Bond Index gained 0.2%.
The FCC’s proposal to revise net neutrality regulations has placed small, internet-reliant businesses in a tough spot, while a restructuring of the telecommunications sector will reflect the wider role the internet plays in communications. A positive economic outlook exists for Zimbabwe as a new leader was inaugurated last week.
Key points for the week
- The Federal Communications Commission released a proposal to change net neutrality rules.
- Major indices introduced plans to restructure technology stocks in a move that could impact hundreds of ETFs.
- Zimbabwe finally replaced Robert Mugabe as president.
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.
The FCC has released its proposed regulations to negate current net neutrality rules set in 2015. The current regulations prevent blocking, throttling, and paid prioritization, which ensures full access to unaltered internet service. Supporters of the new proposal say it will promote innovation and job creation in the internet services industry. Small businesses with heavy reliance on the internet may be impacted negatively, while large companies may benefit.
A restructuring of the Global Industry Classification Standard (GICS) has been announced by S&P Dow Jones Indices and MSCI. The GICS sectors classify companies into groups that support a wide array of index mutual funds and exchange traded funds. The telecommunication services sector is being broadened and renamed “communication services” to reflect the wider role the internet plays in communications. Facebook, Google parent Alphabet, and Netflix will all likely be part of the new sector when the changes take effect next September.
Emmerson Mnangagwa is the new leader of Zimbabwe after Robert Mugabe was forced to resign last week. Mnangagwa was the vice president under Mugabe. He fled to South Africa after being fired earlier this month. During the inauguration, Mnangagwa praised the former leader but emphasized differences in their policies. Mugabe ruled Zimbabwe for 37 years and oversaw ruinous hyperinflation and a devastated economy.
Fun story of the week
(Please note the audio is bleeped to hide the disappointment of the film crew.)
After the Georgia Dome in Atlanta, one of the largest domed stadiums in the U.S., was replaced by the Mercedes-Benz Stadium in August, the city of Atlanta decided to implode the Georgia Dome. Large crowds and news reporters were drawn to the event, hoping to see the massive stadium collapse. But a Marta bus driver had the same idea – and it came at the expense of the Weather Channel’s camera shot.
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. The views stated in this letter are not necessarily the opinion of CWM, LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. 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.