Investment Review – December 2016

December 8, 2016 Investment Review
  1. U.S. stock indices rallied in November, based on generally upbeat economic news and the economic stimulus forecast from the new administration. The Dow Jones Industrial Average gained 5.4%, the S&P 500 was up 3.7%, and the Nasdaq Composite rose 2.6%. International equity markets continued their downward trend of October. The MSCI Europe Australia Far East Index (EAFE) fell 1.3% and the MSCI Emerging Markets Index was down 4.4%.

  2. In the two weeks following the presidential election, domestic stock funds attracted $30.1 billion as reported by the Investment Company Institute. This was the second biggest two week surge on record, exceeded only by a period in July 2007. The outflow from bond funds during the same period was $11.4 billion, the largest since 2002.

  3. The dollar extended its powerful rally in November, anticipating fiscal spending and tax cuts by the new administration resulting in economic growth in the U.S. Central banks around the globe have tried to stabilize their currencies in the wake of the dollar’s rally. A stronger dollar can make U.S. products more expensive overseas, hurting demand. U.S. multinationals’ profits could be at risk if the dollar stays strong.

key investment statistics

Sources: Bloomberg LLC, FACTSET, U.S. Commerce Department, Bloomberg BusinessWeek, IHS iSuppli

* This commentary reflects the opinions of Welch & Forbes based on information that we believe to be reliable. It is intended for informational purposes only, and not to suggest any specific performance or results, nor should it be considered investment, financial, tax or other professional advice. It is not an offer or solicitation.

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