In The Spotlight
In The Spotlight
Choosing the right asset classes for your portfolio can be difficult. Learn more about why portfolio construction matters below.
In The Spotlight
Stay on top of the latest market developments, key themes, and investment ideas affecting your portfolio and practices.
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In the US, the mismatch between labor supply and demand is top of mind for policymakers. While the ease of finding a job has returned to pre-pandemic levels, labor market supply remains suppressed due to early retirement, generous unemployment benefits, and lingering health concerns. Individuals that would otherwise take jobs on offer appear to be delaying the search.
US equities rallied at the tail end of this past week following a weaker-than-expected payrolls release that eased concerns of a shift to tighter monetary policy. Growth-style equities would have been particularly vulnerable to the possibility of rising rates, leading the S&P 500 to rise 0.64% this past week. In the UK, optimistic energy demand estimates overtook inflation worries and drove the FTSE 100 0.73% higher. The Eurostoxx 600 also moved higher this past week, up 0.26%. Read More
Continued OPEC+ commitment to supply restraints and an effective COVID-19 vaccination rollout within the US and European economies drove oil prices higher. Prices were additionally bolstered by lower-than-expected US crude inventory and Iranian oil supply, driving WTI and Brent crude oil to $69.62 and $71.89 per barrel, respectively. Read More
US Treasuries saw volatile trading on the back of mixed jobs data, with 10-Year yields hitting their highest levels since mid-May before ending the week lower at 1.56%. This past week, the Fed announced that it would wind down the portfolio of its Secondary Market Corporate Credit Facility, signaling confidence in the US IG credit market. In Europe, the 10-Year UK Gilt and German bund yields ended the week at 0.79% and -0.21%, respectively. Read More
The US dollar whipsawed this past week, ending 0.04% higher against a basket of peers as jobs reports showed a mixed picture of the US recovery. In China, the yuan reached a three-year high against the US dollar, raising concerns about the competitiveness of Chinese exports. The PBoC announced that in response, financial institutions would need to increase the ratio of their forex reserves. Read More
US ISM Manufacturing posted roughly in-line with expectations, rising to 61.2 in May from 60.7 the month prior. At a composition level, the print was softer than the headline index, as both the production and employment components declined. In China, the Composite PMI posted 53.8 in May, mostly driven by services. Read More
Euro area inflation is expected to edge higher in May, with the HICP flash estimate indicating an above-consensus rise of 2.0% YoY, up from 1.6% in April. Energy prices are set to have the highest annual rate in May at 13.1%, followed by services prices at 1.1%. Read More
In the US, nonfarm payrolls rose by 559k in May, coming in significantly below expectations but higher than the surprisingly weak 266k print in April. The unemployment rate declined 0.3 pts to 5.8% in May, in-line with expectations. While some investors saw the print as disappointing, others were optimistic that the Fed may remain dovish as a result. US initial jobless claims continued their downward trend, falling to a lower-than-expected print of 385k for the week ending May 29. In the Euro area, unemployment continued its decline, posting 8.0% in April, down from 8.1% in March. Read More
For style performance, Large, Mid, and Small refer to the Russell 1000, Russell Midcap, and Russell 2000 indices, respectively. Value refers to companies with lower price-to-book ratios and lower expected growth values, and Growth refers to higher price-to-book ratios and higher forecasted growth values. Government, Corporate, and High Yield refer to the US Treasury index, the US Corporate Credit index, and the US High Yield index, respectively. Short, Intermediate, and Long refer to the Short, Intermediate, and Long segments of their respective curves. Quality returns refers to the credit quality of asset classes ranging from Government, highest quality, to High Yield, lowest quality.
China CPI YoY (Cons: 1.6%, Prior: 0.9%)
China PPI YoY (Cons: 8.5%, Prior: 6.8%)
US Jobless Claims (Cons: 370k, Prior: 385k)
US Core CPI YoY (Cons: 4.7%, Prior: 4.2%)
US CPI YoY (Cons: 3.4%, Prior: 3.0%)
UMich Cons. Sentiment (Cons: 84.2, Prior: 82.9)
“Euro PMI” refers to the Markit Eurozone Composite Purchasing Managers’ Index. “Cons. Conf.” refers to US Consumer Confidence. “GE IFO Business” refers to the German Ifo Business Climate Survey. “New Home Sales” refers to US New Home Sales (MoM). “Dur. Gd. Ord.” refers to US Durable Goods Orders. “UK GDP” refers to the QoQ estimate of the United Kingdom’s Gross Domestic Product for Q3. “Euro M3” refers to the YoY change in the Eurozone’s M3 Money Stock. “US GDP” refers to the estimate of US Gross Domestic Product for Q3. “Pers. Cons.” refers to US Personal Consumption. “UMich Cons. Sent.” refers to the University of Michigan Consumer Sentiment Index. “Japan Core-Core CPI” refers to Japan’s Consumer Price Index (ex- Food, Energy YoY).
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