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MARKET MONITOR 
|
June 11

MARKET MONITOR | June 11

Chart of the Week


EQUITIES

Strong GDP growth and rising rates have historically led to favorable performance for value stocks. Data indicates that periods of growth underperformance relative to value (by 20-30%) have often corresponded with higher interest rates. Prospects of additional infrastructure spending and tax rate hikes may also bode well for value in the near-term. Over long-term horizons, we continue to advocate for a balance of value and growth.

Source: GS GIR. Past performance doesn't guarantee future results which may vary

Market Summary


GLOBAL EQUITIES

US equities continued to rally last week following market expectation for inflationary pressure, driven by pent-up demand and supply constraints, to remain transitory and fade later this year. Concerns that the Fed will increase rates abated, leading the S&P 500 to rise 0.43% and reach a new record high above 4,230. The FTSE 100 ended 0.94% higher as the ECB pressed on with its plans to continue bond purchases. The Eurostoxx 600 also gained 1.11% this past week. Read More

COMMODITIES

Brent crude closed at its highest price since May 2019, as OPEC forecasted strong oil demand growth accelerated by the global economic recovery. WTI prices were supported by declines in US crude inventories and improving US labor slack. WTI and Brent crude oil prices closed at $70.91 and $72.69 per barrel, respectively. Read More

FIXED INCOME

Sovereign yields fell last week as economic data supported the case for continued accommodative central bank policy. In the US, the jump in core inflation was driven by reopening categories, in line with the Federal Reserve’s expectation that price increases may be short-lived. The 10-Year Treasury fell 10bps to 1.46%, and the 2-Year held at 0.15%. Rates also declined in Europe, where the European Central Bank left all key policy parameters in place, and the 10-Year bund yield fell 6bps to -0.27%. Despite a strong April GDP report, the UK 10-Year Gilt yield eased 8bps to 0.71%. Read More

FX

Currency markets were subdued last week as economic data and central bank policy was largely expected. The US dollar index ended the week up 0.52% against a basket of peers as cautious optimism prevailed. The British pound and euro closed at 1.4107 per USD and 1.2102 per USD, respectively. Read More

Economic Summary


JOBS

US initial jobless claims reached a new pandemic low, falling to 376k for the week ending June 5. While improving, weekly claims still post above pre-pandemic levels of 200k and job openings stands at an all-time high of 9.3 million as of April month-end. Read More

INFLATION

The US consumer price index (CPI) rose +5% YoY, the biggest increase since August 2008. The rise is driven by sectors most heavily impacted by the pandemic, such as airlines and car rentals. Excluding food and energy, US inflation increased +3.8% YoY, still reflective of the highest change in the past three decades. Read More

PRODUCTION

China CPI rose +1.3% YoY in May, up from 0.9% in April. While China consumer prices grew slower than expected in May, producer prices surprised to the upside rising +9.0% YoY, the fastest annual pace since 2008. This surge in factory-gate prices was driven by significant price increases in crude oil, iron ore, and non-ferrous metals. Read More

SENTIMENT

UMich Consumer Sentiment index rose to 86.4, above consensus forecast. Expectations for improved business conditions and greater optimism from middle and upper income households contributed to the gains. Read More

Style Performance


US Equity Size & Style Returns

MONTH-TO-DATE

Large
0.26% *
1.20% *
2.18% *
Medium
0.71% *
1.30% *
2.49% *
Small
2.85% *
2.97% *
3.12% *
Value
Core
Growth

YEAR-TO-DATE

Large
18.71%
13.49%
8.64%
Medium
21.72%
16.05%
6.00%
Small
31.09%
18.73%
7.35%
Value
Core
Growth

MSCI World Size & Style Returns

MONTH-TO-DATE

Large
0.61%
1.29%
1.99%
Medium
0.90%
1.19%
1.52%
Small
1.88%
1.95%
2.02%
Value
Core
Growth

YEAR-TO-DATE

Large
16.71%
12.69%
8.68%
Medium
18.93%
13.41%
7.10%
Small
22.12%
16.87%
11.50%
Value
Core
Growth

US Fixed Income Maturity and Quality Returns

MONTH-TO-DATE

Government
0.04%
0.23%
2.18%
Corporate
0.08%
0.43%
2.21%
High Yield
0.55%
0.70%
1.69%
Short
Intermed.
Long

YEAR-TO-DATE

Government
-0.18%
-0.85%
-9.16%
Corporate
0.30%
-0.47%
-3.84%
High Yield
4.21%
3.07%
2.88%
Short
Intermed.
Long

European Fixed Income Maturity and Quality Returns

MONTH-TO-DATE

Government
0.06%
0.54%
1.47%
Corporate
0.09%
0.55%
1.58%
High Yield
0.67%
??????
??????
Short
Intermed.
Long

YEAR-TO-DATE

Government
-0.31%
-0.82%
-6.35%
Corporate
0.22%
0.09%
-2.86%
High Yield
3.18%
??????
??????
Short
Intermed.
Long

Source: Bloomberg, Barclays and GSAM (as of 06/11/21)

VIEW LESS DISCLOSURE

Key Economic Releases


Monday, Jun 14

Tuesday, Jun 15

German CPI YoY (Cons: 2.5%; Prior: 2.5%)

Wednesday, Jun 16

FOMC Rate Decision (Cons: 0.25%; Prior: 0.25%)
UK CPI YoY (Cons: 1.8%; Prior: 1.5%)

Thursday, Jun 17

US Jobless Claims (Cons: 360k; Prior: 376k)

Friday, Jun 18

VIEW LESS DISCLOSURE

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