What happened in October?

In a month dominated by political news and anticipated legislative changes, U.S. and international equities continued their march upward, hitting new highs in October.

A narrow passage of the next fiscal year’s budget plan last month opened the door for a tax reform that would lower federal revenue by $1.5 trillion over the next decade. The tax bill’s passage is still in question but generally viewed as a future boost to businesses and corporations. As U.S. equities moved higher, much of the gains were led by technology stocks with the sector gaining 7.7% in October and 35.7% YTD, far outpacing the other U.S. sectors.

What happened in August?

A flurry of positive economic data from across the globe boosted markets in the final trading session of the month, bringing the S&P 500 Index back into positive territory after a volatile August. Aided by the strongest consumer spending growth in over a year, U.S. GDP growth was revised up to 3% in the second quarter, the highest quarterly growth of the economy in over two years.

What happened in July?

Global stocks moved higher in July amid of variety of positive economic indicators. In the U.S., the Commerce Department reported the economy grew at an annualized 2.6% in the 2nd quarter, up from 1.4% in Q1. The lifted growth precedes the current earnings season which, thus far, is exceeding analysts’ expectations. As of July 28th, 57% of the S&P companies had reported earnings with 73% displaying sales above consensus. If this trend holds, it would be a new record for the percentage of companies reporting better sales figures than analysts predicted. Across the globe, economic growth in the Eurozone also accelerated in Q2 while China’s Caixin manufacturing index showed improvement. The positive data boosted U.S. equities with the S&P 500 Index +2.1% in July and +11.6% YTD. The ACWI ex-U.S., an index measuring international stocks, increased +3.7% in the month and now sits at +18.3% for the year. International equities are on pace for their best year since 2009.

What happened in June?

Stocks softened in June as the Federal Reserve raised lending rates amid a strengthening U.S. and global economy.

U.S. stocks (measured by the S&P 500 Index) moved slightly higher in June, +0.6%, mostly thanks to dividends paid out throughout the month. Investors seem to be in a “wait-and-see” posture, looking for signals from central banks amid strengthening economies. The lack of investor action has kept volatility (as measured by the CBOE Volatility Index) near all-time lows. Technology stocks, (measured by the iShares Dow Jones US Technology ETF) which have been the market’s best producer in 2017, suffered a mild setback in June experiencing a 3.4% loss. Overall, the S&P 500 Index is now +9.3% YTD. Across the globe, international stocks were relatively flat with the MSCI All-Country World ex-U.S. Index +0.3% in June and +14.1% YTD. With the second quarter in the books, focus now shifts to Q2 earnings reports.

What happened in May?

U.S. stocks (measured by the S&P 500 Index) moved +1.3% in May even though the index experienced its largest one-day decline year-to-date on May 17. The S&P 500 Index is now +8.4% YTD while international equities (MSCI ACWI ex-U.S.) advanced +3.3% for the month and +13.7% YTD.

Q1 profits across corporate America increased at their highest rate since 2011 while the U.S. GDP growth estimate was revised up to 1.2%. The healthy macroeconomic data buoyed stocks while volatility remained near historic lows. The lack of stock price swings can be attributed to a number of factors, including desensitized investors when it comes to turbulent geo-political events or the absence of any substantial change in market-moving data.

What happened in April?

Stocks advanced as strong corporate earnings boosted performance.

With almost 60% of the S&P 500 companies having reported 1st quarter performance thus far, corporate earnings are expected to rise over 10% from the prior year. This positive performance pushed stocks higher in April as optimism for accommodative trade policies, lower corporate taxes and reduced regulation, which were spawned by the Trump administration, began to fade. The equity moves in April represented a 4th consecutive monthly gain in the S&P 500 Index in 2017 and six consecutive positive months overall. The rally experienced a shift in beneficiaries as the large-cap growth names have been the big winners in 2017. The S&P 500 Growth Index is +10% YTD while the S&P 500 Value Index is just under +2%. Small-cap stocks, which were a big winner after the Trump election, have cooled off advancing a modest 1.4% YTD. International equities continued to lead the charge with the MSCI ACWI ex-U.S. +2.1% in April and +10.2% YTD.

What happened in March?

Stocks pushed higher last week to close the month in positive territory as fixed income remained hindered by increasing interest rates.

What happened in February?

Positive momentum continued in global equities as U.S. and international stocks advanced for a 4th and 3rd straight month, respectively. The S&P 500 Index gained on 18 of the 21 trading days in February. The shortened month witnessed a reduction in negative geopolitical headline noise and continued positive macroeconomic data releases – U.S. consumer prices (key indicator of inflation) increased the most since February 2013, retail sales gained, and existing home sales rose to their highest level in nearly a decade. Across the pond, U.K. unemployment declined to its lowest rate in ten years, Eurozone PMI increased to a six-year high and Chinese factory activity expanded for an 8th straight month.

What happened in January?

The post-election stock market rally continued in January up until the last few trading sessions of the month. Investor optimism and the appetite for risk could be waning after a disappointing start to earnings season and the unknown financial impact of the recent political policy changes.

What happened in December?

Post-election market momentum continued into December as global equities advanced over the course of the month despite the Federal Reserve decision to raise interest rates and a final-week pullback.