MARKET REPORT: September 2017

Prepared by Brandon Yee and Thomas Connelly

 

Commentary
Developed Markets Record Strong Month– In the month of September, most developed markets recorded gains except for the Pacific ex Japan region. Europe ex UK and the U.S. market posted gains of 3.29% and 2.00%, respectively.

 

Commentary
Emerging Markets Rally Takes a Breather – The broader emerging markets dropped one percent in September. India and Mexico were the primary laggards. Russia and Brazil had the largest gains of 4.47% and 4.23%, respectively. Emerging markets have still outperformed developed markets over the past year.

 

Commentary
Energy Bounces Back- Energy and industrials posted the strongest global sector returns of 8.80% and 3.88%, respectively. Utilities and infrastructure had the toughest month, dropping 2.53% and 1.80%, respectively.

 

Commentary
Value Outperforms- In September, domestic value indices outperformed their growth counterparts. Small-cap value stocks recorded a strong return of 7.08%.

 

Commentary
Momentum Edges Higher– In the international developed markets, value indices outperformed growth indices for the month. Momentum posted a strong return of 3.60%.

 

Commentary
Inflation Picks Up– Money market fund and T-Bill yields are still low. The CPI has increased by 1.93% over the past year, which is higher than the five and ten year numbers.

 

Commentary
Deflationary Hedges Broadly Lower – The returns of deflationary hedges were mostly lower for the month. High yield and leveraged loans recorded the strongest returns of 0.90% and 0.39%, respectively. Catastrophe bonds were hit hard by the active hurricane season. Long-term government bonds declined by 2.14%.

 

Commentary
Natural Gas Dips Lower– Inflation-sensitive investment returns were mostly negative in September. Crude oil posted a large gain of 7.82%. Natural gas and TIPs dropped 2.98% and 2.31%, respectively.

 

Commentary
Euro Gaining Ground on U.S. Dollar– The change in the U.S. dollar versus other major currencies has been mixed over the past three months. The Canadian Dollar and Euro appreciated the most versus the U.S. dollar. The Swiss Franc and Indian Rupee lost the most versus the USD over the same time period.

 

 

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