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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Rising global COVID-19 cases have raised concerns that we are on the brink of a fourth wave. While a new wave could bring several challenges, the impact may be more muted than those seen in prior waves. Vaccine availability, the development of new medications, and a lower appetite for lockdowns may mean less severe health and economic consequences, and a potentially reduced impact on portfolios.
US equities saw a choppy week of trading based on mixed sentiment from strong retail sales and labor data versus elevated inflation and Fed policy concerns. The S&P 500 finally ended the week higher at 0.36%. In the UK, the FTSE 100 declined –1.64% following the UK’s decade-high inflation print, which fueled BoE rate hike expectations. The EuroStoxx 600 ended relatively flat at -0.11% as inflation data reversed positive, earnings-driven sentiment. Read More
Concerns over dwindling inventories were alleviated following the API’s report of a crude inventory build and the OPEC’s monthly report, which stated that rising supply could ease oil market tightness. Moreover, a potential effort to add crude supply from US and Chinese strategic stockpiles may also ease near-term price surges. Brent and WTI finally ended the week lower at $76.10 and $78.89 per barrel, respectively. Read More
US Treasury yields saw mixed performance this past week, as strong economic data reflecting favorable consumer sentiment and improving labor conditions was offset by speculation around the Fed chair election and the associated policy outcomes. These movements finally drove the 10-Year US Treasury yield lower to 1.53%. In Europe, worsening COVID-19 cases and potential lockdown concerns led the 10-Year UK Gilt and German Bund yields lower to 0.88% and -0.34%, respectively. Read More
The US dollar index rose last week as expectations for a potentially more hawkish Fed continued to prop up the US dollar, ultimately leading the greenback to rise 0.71% against a basket of peers. In Europe, higher-than-expected UK CPI drove the sterling higher to $1.3447 while the euro ended the week lower at $1.1289. Read More
US retail sales rose by a greater-than-expected 1.7% in October, reflecting robust spending even amid rising prices and supply chain constraints. The print was driven by non-store retail, gasoline stations, and electronics categories, but offset by weaker sales in clothing and health-related stores. Read More
The first estimate of Japan’s Q3 GDP growth posted significantly lower than expected, at -3.0% QoQ annualized. The reading came as state of emergency and infection control measures weighed on the economy, with capex, consumer spending, and exports seeing the sharpest declines. Read More
US initial jobless claims moved lower for the seventh week in a row, posting 268k for the week ended November 13, down from 269k in the week prior. The print marks a new pandemic-era low, suggesting that the economy is continuing on its recovery track. UK labor market improved further in September with the ILO unemployment rate at 4.3%, beating market consensus of 4.4%. Coupled with higher-than-expected consumer price annual inflation (4.2% vs. 3.9%), UK labor market tightness points to a December liftoff. Read More
Source: Bloomberg and Goldman Sachs Asset Management. For style performance, Large, Mid, and Small for US Equity 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. For US Fixed Income, Government, Corporate, and High Yield refer to the Bloomberg Treasury, Bloomberg Corporate Credit, and Bloomberg High Yield indices, respectively. Short, Intermediate, and Long refer to the Short, Intermediate, and Long segments of their respective curves. For European Fixed Income, Government, Corporate, and High Yield refer to the Bloomberg Euro Treasury Index, the Bloomberg Euro Corporate Index, and the Bloomberg Euro High Yield Index, respectively. Quality returns refers to the credit quality of asset classes ranging from Government, highest quality, to High Yield, lowest quality. Since August 24, 2021, the Barclays indices are branded “Bloomberg indices”. Please see end disclosures for footnotes. Past performance does not guarantee future results, which may vary.
Euro area Composite PMI (Cons: 53.0, Prior: 54.2)
Germany Ifo Business (Cons: 96.7, Prior: 97.7)
US Jobless Claims (Cons: 261k, Prior: 268k)
UMich Cons. Sentiment (Cons: 66.9, Prior: 66.8)
“Euro area Composite PMI” refers to the Markit Eurozone Composite Purchasing Managers’ Index. “Germany Ifo Business” refers to the German Ifo Business Climate Survey. “US Jobless Claims” refers to the number of people filing to receive unemployment insurance benefits for the week ending November 20. “UMich Cons. Sentiment” refers to the University of Michigan Consumer Sentiment Index.
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