april 2017 capital market review · 2017-05-05 · wilde capital management, 60 morris turnpike,...
TRANSCRIPT
Wilde Capital Management, 60 Morris Turnpike, Summit, New Jersey, 07901 (866) 894-5332
www.wildecapitalmgmt.com [email protected]
APRIL2017CAPITALMARKETREVIEWInternationalstockandbondmarketsoutpacedU.S.marketsinthemonthofAprilledbyEuropeanequities.
BondMarkets*FixedincomemarketsdeliveredpositivereturnsinAprilledbyinternationalmarketsandlonger-datedU.S.bonds.EmergingMarketlocalcurrencyanddollardenominatedsovereigndebtalsooutperformed.
InternationalCreditandgovernmentbondsrose2.1%and1.4%,respectively,bolsteredbydollarweakness.Bloomberg’sindexoftheU.S.dollar’sexchangeratemeasuredagainstabasketofmajorcurrenciescontracted0.52%duringApril.
EquityMarkets*KeyEuropeanmarketscontinuedtoleadglobalstockboursesinApril.Frenchequitiesrallied5.7%asmeasuredinU.S.dollarterms,boostedbyEmmanuelMacron’sfirstroundvictoryinthepresidentialrace.GermanyandItalyalsofaredwell,rising3.2%and2.8%,respectively.
WiththeexceptionofLatinAmericanequities,whichcontractedamodest0.2%,therestoftheworldpostedrespectablereturns.TheU.K.climbed1.7%whileEmergingMarketsrose1.6%.TheU.S.anddevelopedAsialaggedglobalequities.
Wilde Capital Management, 60 Morris Turnpike, Summit, New Jersey, 07901 (866) 894-5332
www.wildecapitalmgmt.com [email protected]
CommodityMarkets*CommoditypricesfacedheadwindsinAprilwiththeloneexceptionofGold,whichrallied1.7%.OilsupplyremainshighasU.S.shaleproducersoffsettheimpactofOPECproductioncuts.ConcernsaboutweakeningdemandfromChinaduetogovernmentrestrictionsonborrowingtookatollonindustrialmetals.
*Thereturnscitedintheaboveparagraphsreflecttotalreturnperformanceofexchangetradedfundslistedinthecorrespondingbarchartsonthispage.PORTFOLIOPOSITIONING
WecontinuetopositionportfoliostowardstheU.S.acrossequitiesandfixedincome.WeprefertherelativesafetyofU.S.assetsbut,withinequities,wealsohaveafavorableviewofAsiaandtheemergingmarkets.IntheU.S.stockmarketwehavethestrongestpreferenceforsmallandmid-capcompanies.Cashpositionsinportfoliosaregenerallyneutral.
OurbondallocationsalsofavortheU.S.overtherestoftheworldwithsizablecommitmentstoshort-termcorporatecreditandconvertiblesecurities.Wecontinuetobepositionedwithlowerdurationthanthebenchmark.Wehavemodestexposuretodevelopedinternationalgovernmentbondsandcorporatecreditthroughacurrencyhedgedinstrument.Wehavenoemergingmarketdebtholdingsatthistime.
“InternationalstockandbondmarketsoutpacedU.S.marketsinthemonthofAprilledbyEuropeanequities.ThiswasinpartduetoU.S.
dollarweakness.”
Wilde Capital Management, 60 Morris Turnpike, Summit, New Jersey, 07901 (866) 894-5332
www.wildecapitalmgmt.com [email protected]
RISKOUTLOOK
Globaleconomicactivity,althoughsomewhattepid,remainsonasteadycourse.Consumerandbusinesssentimentindicatorsarerising,corporateearningsgrowthisexpandingandwhileinflationispickingup,itisnotyetproblematic.Fiscalpolicyinthedevelopedworldwillmostlikelycontinuetobeexpansionaryandmonetarypolicy,onbalance,shouldremainaccommodative.PoliticalrisksontheEuropeancontinentappeartobediminishingbasedonrecentelectionresults.Allofthesedevelopmentsarepositiveforriskassets.
TheU.S.FederalReserveappearsontracktoraiseinterestratestwomoretimesthisyear.TheFedhasbeencautiousinitsapproachandweexpectcontinuedtransparencyregardingtheirintentions(regardingbothinterestratepolicyandthereductionofits$4.5trillionbalancesheet).ThelegislativetravailsoftheTrumpadministrationareconcerningbutweareencouragedbytheircontinuingeffortstoachieveregulatoryreliefandinitiateontaxreform.BasedonrecentmilitaryactioninSyriaandAfghanistan,andescalatingtensionswithNorthKorea,geopoliticalriskalsoremainsinfocus.
KEYEVENTSINMAY
Week1
§ 5/1U.S.MarkitMfgPMI§ 5/1ChinaCaixinMfg.PMI§ 5/2U.K.MarkitMfgPMI§ 5/2EurozoneMarkitMfgPMI§ 5/2EurozoneUnemploymentRate§ 5/3U.S.FOMCInterestRateDecision§ 5/3EurozoneGDP
Week2
§ 5/8JapanConsumerConfidence§ 5/9ChinaPriceIndexSurveys§ 5/11U.K.BankofEnglandReports§ 5/11-5/12U.S.PriceIndexSurveys
Week3
§ 5/16U.K.PriceIndexSurveys§ 5/17EurozoneCPI§ 5/17JapanGDP§ 5/19EurozoneConsumerConfidence
Week4&5
§ 5/22ChinaLeadingEconomicIndex§ 5/22JapanLeadingEconomicIndex§ 5/24U.S.FOMCMeetingMinutes§ 5/25U.K.GDP§ 5/25JapanPriceIndexSurveys§ 5/26U.S.GDP§ 5/26U.S.U.ofMich.ConsumerSentiment§ 5/30U.K.GFKConsumerConfidence§ 5/30EurozoneConfidenceSurveys§ 5/31U.S.FedReleasesBeigeBook§ 5/31JapanNikkeiMfgPMI
Wilde Capital Management, 60 Morris Turnpike, Summit, New Jersey, 07901 (866) 894-5332
www.wildecapitalmgmt.com [email protected]
DISCLOSURESWildeCapitalManagement,LLCisaregisteredinvestmentadviser.Informationpresentedisforeducationalpurposesonlyanddoesnotintendtomakeanofferorsolicitationforthesaleorpurchaseofanyspecificsecurities,investments,orinvestmentstrategies.Investmentsinvolveriskand,unlessotherwisestated,arenotguaranteed.Besuretofirstconsultwithaqualifiedfinancialadviserand/ortaxprofessionalbeforeimplementinganystrategydiscussedherein.Pastperformanceisnotindicativeoffutureperformance.Itisimportanttorememberthattherearerisksinherentinanyinvestmentandthatthereisnoassurancethatanymoneymanager,fund,assetclass,style,indexorstrategywillprovidepositiveperformanceovertime.Diversificationandstrategicassetallocationdonotguaranteeaprofitnorprotectagainstalossindecliningmarkets.Allinvestmentsaresubjecttorisk,includingthelossofprincipal.Theinformationcontainedhereinisbaseduponthedataavailableasofthedateofthisdocumentandissubjecttochangeatanytimewithoutnotice.Portfoliosthatinvestinfixedincomesecuritiesaresubjecttoseveralgeneralrisks,includinginterestraterisk,creditrisk,theriskofissuerdefault,liquidityriskandmarketrisk.Theseriskscanaffectasecurity’spriceandyieldtovaryingdegrees,dependinguponthenatureoftheinstrument,andmayoccurfromfluctuationsininterestrates,achangetoanissuer’sindividualsituationorindustry,oreventsinthefinancialmarkets.Ingeneral,abond’syieldisinverselyrelatedtoitsprice.Bondscanlosetheirvalueasinterestratesriseandaninvestorcanloseprincipal.Ifsoldpriortomaturity,fixedincomesecuritiesaresubjecttogains/lossesbasedonthelevelofinterestrates,marketconditionsandthecreditqualityoftheissuer.Foreigninvestmentsaresubjecttorisksnotordinarilyassociatedwithdomesticinvestments,suchascurrency,economicandpoliticalrisks,andmayfollowdifferentaccountingstandardsthandomesticinvestments.Investmentsinemergingordevelopingmarketsinvolveexposuretoeconomicstructuresthataregenerallylessdiverseandmature,andtopoliticalsystemsthatcanbeexpectedtohavelessstabilitythanthoseofmoredevelopedcountries.ThesesecuritiesmaybelessliquidandmorevolatilethaninvestmentsinU.S.andlonger-establishednon-U.S.markets.Aninvestmentinsmall/mid-capitalizationcompaniesinvolvesgreaterriskandpricevolatilitythananinvestmentinsecuritiesoflargercapitalization,moreestablishedcompanies.Suchsecuritiesmayhavelimitedmarketabilityandthefirmsmayhavemorelimitedproductlines,marketsandfinancialresourcesthanlarger,moreestablishedcompanies.Portfoliosthatinvestinrealestateinvestmenttrusts(REITs)aresubjecttomanyoftherisksassociatedwithdirectrealestateownershipand,assuch,maybeadverselyaffectedbydeclinesinrealestatevaluesandgeneralandlocaleconomicconditions.Portfoliosthatinvestasignificantportionofassetsinonesector,issuer,geographicalareaorindustry,orinrelatedindustries,mayinvolvegreaterrisks,includinggreaterpotentialforvolatility,thanmorediversifiedportfolios.ImportantDisclosures:Exchange-TradedFundsExchange-tradedfunds(ETFs)areinvestmentvehiclesthatarelegallyclassifiedasopen-endinvestmentcompaniesorunitinvestmenttrusts(UITs),butdifferfromtraditionalopen-endinvestmentcompaniesorUITs.ETFsharesareboughtandsoldatmarketprice(notnetassetvalue)andarenotindividuallyredeemedfromthefund.Thiscanresultinthefundtradingatapremiumordiscounttoitsnetassetvalue,whichwillaffectaninvestor’svalue.SharesofcertainETFshavenoorlimitedvotingrights.ETFsaresubjecttoriskssimilartothoseofstocks.ETFsincludedinportfoliosmaychargeadditionalfeesandexpensesinadditiontotheadvisoryfeechargedfortheSelectedPortfolio.Theseadditionalfeesandexpensesaredisclosedintherespectivefund/noteprospectus.Forcompletedetails,pleaserefertotheprospectus.Foradditionalinformationregardingadvisoryfees,pleaserefertotheFeeSummaryand/orFeeDetailpages(ifincludedwiththisreport)andtheprogramsponsor's/eachco-sponsor'sFormADVPart2,WrapFeeBrochureorotherdisclosuredocuments,whichmaybeobtainedthroughyouradvisor.CertainETFshaveelectedtobetreatedaspartnershipsforfederal,stateandlocalincometaxpurposes.Accordingly,investorsinsuchETFswillbetaxedasabeneficialownerofaninterestinapartnership.TaxinformationforsuchETFswillbereportedtoinvestorsonanIRSscheduleK-1.Investorsshouldconsultwiththeirtaxadvisorsindeterminingthetaxconsequencesofanyinvestment,includingtheapplicationofstate,localorothertaxlawsandthepossibleeffectsofchangesinfederalorothertaxlaws.