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News and Insights » UMAFS Market Review Week Ending 3/3/2017

UMAFS Market Review Week Ending 3/3/2017
 
Markets continued to surge upward this past week as President Trump gave his first address to Congress. Investors seemed to be pleased with the message as he affirmed hopes for greater fiscal spending and deregulation. The resulting positive rally empowered the S&P 500 to finish February with its largest monthly gain since March of 2016, rising 3.7%.

The strong year-to-date performance of the U.S. equity markets has also helped to shift market sentiment surrounding a March rate increase. Most analysts now estimate a 90% probability of a rate hike taking place during the March 14th – 15th Federal Open Market Committee (FOMC) meeting. This is quite a change from February’s earlier projections, which estimated a 75% likelihood that the Fed would instead leave rates unchanged during their March meeting.  

Finally, U.S. 10-Year Treasury yields surged this past week to 2.49%, in their largest one-week move since the two weeks following the U.S. Presidential election. A week of hawkish comments from Fed officials drove much of the move, but economic fundamentals also support burgeoning interest rates. Improvements in manufacturing and spending data accompanied the lowest jobless claims report in 44 years, strengthening expectations for 3 rate hikes in 2017. Global yields followed suit, with UK 10-Year Gilts and German 10-Year Bunds rallying to 1.19% and 0.36%, respectively.

March 7th, 2017 @ 12:00am by UMAFS
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