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March 7, 2018 |

The month of February started with a changing of the guard as markets sold off and volatility made its way back into the conversation. The S&P 500's run of consecutive positive monthly total returns came to an end, though markets still remain in positive territory for the year. U.S. government bond yields increased across the curve. Congress passed a two year budget deal that will raise government spending following the passing of the $1.5 trillion tax cut. Fears of inflation pressures picked up with strong wage growth reported and unemployment remaining low. Investors have linked increased inflation fears as one of the triggers causing the market sell off earlier in the month. A more hawkish tone from the Fed's new leader, Jerome Powell, is causing some forecasters to now expect four rate hikes in 2018 compared to three previously assumed. Stimulative fiscal policy continues to lead Fed officials to report that the economic outlook remains strong. Further rate hikes could cause additional market volatility as the Fed works to deter the economy from overheating. A 25 basis point rate increase is expected in March.

February 12, 2018 |

China for many centuries was the World’s largest economy until the United States bumped it from its pedestal.  In the near future it is likely that China will regain its title of largest economy in the World.

We believe the construction of the World indices may be causing investors to have a truly underweight position to China.  Just like any investment, we must consider the return potential and the risks.  For investors that can get to know the risks of investing in China, they will better be able to determine the risk/reward payoff and will likely be at an advantage relative to most.

February 5, 2018 |

In light of recent market activity, Pathstone’s Chief Investment Office is sharing the enclosed market update.

February 1, 2018 |

Equity markets got off to a fast start in January with most major indices rising. The S&P 500 Index posted another month of positive total returns, the 15th month in a row. U.S. GDP grew by 2.6% in Q4, lower than the 3% consensus expectation. Consumer spending and business investment in equipment were both strong, however, inventory drawdown and net imports both weighed on growth. The 10-yr Treasury yield increased to 2.7%, its highest level since April 2014. Despite this increase the yield curve still remains relatively flat. International and Emerging Market equities continue to benefit from strong global economic growth. Further weakness in the U.S. dollar has also boosted returns for domestic investors. As expected, on January 25, the ECB announced that they would maintain current monetary policy. Mario Draghi, President of the ECB, said he sees “very few chances” that interest rates will be raised this year. Low rates and solid economic momentum should continue to be supportive for Euro area equities. Within the U.S., the Federal Reserve maintained the Federal Funds rate at current levels. The next meeting is scheduled to begin on March 20th.