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News and Insights » Market Review Week Ending: June 30, 2017

Market Review Week Ending: June 30, 2017

U.S. equities ended the week 0.6% lower, capped by a 2% drop in technology, this year’s strongest performing S&P 500 sector. After five weeks of losses WTI Crude Oil rose 7%, while bank stocks also surged higher on the back of positive capital test results.  However, for the week neither equities nor bonds reacted well to speeches that international economies are improving, which suggests the European Central Bank (ECB) could soon begin reducing its quantitative easing purchases and the Bank of England (BoE) even possibly increasing interest rates sometime this year.

Overall, the U.S. economy continues to look healthy, with unemployment now lower than it has been 96% of the time,since 1970. Given the tight labor market, the Federal Reserve (Fed) raised rates again last month and announced that they will likely to start reducing the size of their balance sheet “relatively soon”.

One of the key questions for the rest of the year will be the extent to which bond and equity markets can withstand a gradual reduction in monetary stimulus, which has helped support markets in recent years. We acknowledge the potential for more volatility in the second half of the year, but stick with our conviction that a still healthy global economy should be supportive for equity markets and a well-diversified investment strategy will continue to help smooth out market returns.

Both UMAFS and U.S. equity markets will close at 1 p.m. ET on Monday, July 3, 2017, in advance of the 4th of July holiday, remaining closed all day Tuesday and then reopening for normal hours Wednesday.

July 3rd, 2017 @ 12:00am by UMAFS
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