In late 2016, Natixis Global surveyed 500 institutional decision makers representing corporate pension plans, public pension plans, sovereign wealth funds, insurance companies, foundations, and endowments. Survey participants said market volatility, geopolitics, and interest rates were their top risk concerns for 2017.
So far, U.S. stock markets haven’t proven to be very volatile, but geopolitics caused some disruption last week. Barron’s reported:
“Stocks fell 1 percent last week in quiet trading, with many market participants out for religious observances. Worries about the war in Syria, North Korean saber-rattling, and the coming French elections had investors reining in riskier positions and heading for safe havens.
Real estate, utilities, and consumer-staples stocks were the only sectors that rose last week. Financials – and banks in particular – fell, despite strong earnings reports from the industry’s big kahunas.”
It was a tough week for stocks, but investors’ flight to safety caused Treasury bonds to rally. Reuters reported the interest rate on 10-year Treasury notes fell 14 basis points. That’s the biggest weekly decline since January 2016. (There is an inverse relationship between bond interest rates and bond prices. When interest rates fall, bond prices rise, and vice-versa.)
THE MARKETS
DISCLOSURES
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SOURCES:
https://ngam.natixis.com/cs/us/Render.jsp?did=1250236377948
http://www.barrons.com/articles/stocks-slip-1-on-week-as-geopolitical-worries-grow-1492229480?mod=BOL_hp_we_columns (or go tohttps://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/04-17-17_Barrons-Stocks_Slip_1_Percent_on_Week_as_Geopolitical_Worries_Grow-Footnote_2.pdf)
http://www.reuters.com/article/us-global-markets-idUSKBN17F03U
http://www.investopedia.com/ask/answers/04/031904.asp