It is foolish and wrong to mourn the men who died. Rather we should thank God that such men lived.
— General George S. Patton
Equities in the US increased last week, closing on Friday at just below a record high. The advance through May 26 reflects the strongest weekly performance for the major asset classes, based on a set of representative exchange-traded products.
Smart beta: 2017 global survey findings from asset owners
May 22, 2017
How much higher can smart beta adoption climb? Now in its fourth year, FTSE Russell’s latest annual survey of global institutional asset owners indicates that smart beta adoption is at an all time high and that investors continue to find new applications for its use.
The survey, Smart beta: 2017 global survey findings from asset owners, reveals that the percentage of asset owners reporting an existing smart beta allocation has reached a new peak of 46%, up from 36% last year. The trend over the past three years shows that increasing global growth and adoption of smart beta is continuing in 2017, with adoption of smart beta in Europe still greater than in North America and Asia Pacific, with 60% of asset owners reporting an allocation.
April was a rough month for housing. For the first time in a year, housing starts and sales of new and existing homes declined for the monthly comparison. The weakness weighed on the year-over-year change, which slumped to an 18-month low. Given housing’s critical role for growth, the slowdown would be worrisome if other corners of the economy weren’t showing signs of strength. Nonetheless, a soft housing market isn’t easily dismissed for business-cycle analysis.
The Federal Reserve is widely expected to raise interest rates again in June, a policy decision that looks set to further squeeze the Treasury yield curve. The spread between the 10-year and 3-month yield is already the smallest since last October and another rate hike could cut the difference even more.
The tepid rise in first-quarter GDP growth is on track for a sharp acceleration in Q2, according to estimates from several sources.
Foreign government bonds in developed markets roared last week, generating the strongest performances among the major asset classes, based on a set of proxy exchange-traded funds.
Political uncertainty for the US is on the rise, but economic risk remains low. The turmoil surrounding President Donald Trump raises questions about the viability of his administration’s pro-growth policy agenda. Nonetheless, it’s debatable if the economy is vulnerable due to elevated political risk, in part because there’s no sign of macro stress based on the numbers published to date.