For the week ending May 23, stock markets performed well with all the broad geographies in positive territory for the week. US stocks grew +1.22 to +1.35%, other developed markets stocks returned +0.45% to + 0.47% and emerging market stocks returned +0.55% to +0.68%. Fixed income returns were -1.02% to -0.15%. Real estate (REITs) returns lagged domestically by -0.67% to -0.54% but grew internationally +0.16% to +0.39%.
Taking a step back and looking at the general economic trends emerging in 2014 so far. The US has had a mixed start to the year as weather issues weakened Q1 growth to a much greater extent than anticipated, though the economy has returned to robust growth since then. The Ukraine crisis has occupied a lot of headlines, but the negative market impact has been contained to Ukraine and Russia, which is a small proportion of global financial markets. China’s GDP growth has slowed in 2014 reflecting lower exports and investment. This slowdown is after China has been a star economy for many years. In addition to China, emerging markets generally are seeing slightly lower exports. However, developed markets including the Euro area, UK and Canada are seeing accelerating growth in 2014. Growth in Japan has been extremely robust after years of deflation, though the impact of a consumption tax hike in April has yet to be fully assessed. Overall the global picture is somewhat mixed, but the broad theme we believe is one of returning growth especially in developed markets. Given that trends in different regions are often distinct, we allocate investments globally to lower risk.
The FutureAdvisor performance calculated is net of fees but before trading costs. Differences in account size, age of clients, risk tolerance, timing of transactions and market conditions may lead to different results. Past performance is not indicative of future results. The views expressed are not intended to serve as a forecast, a guarantee of future results, investment recommendations or an offer to buy or sell securities.