2017 began with high expectations for economic robustness and with
investors savoring the taste of President’s Trump’s victory, which was topped
off with Republican control of all branches of the federal government. The
stock market, high yield and global risk markets were on fire until crude oil
and commodities resumed their bear markets (begun in May 2011) in mid-January
2017. As of June 30, 2017, domestic stocks and lower quality foreign stock and
bond markets remain in bull markets, but domestic high-yield bonds, real estate
stocks, energy securities and technology shares have stalled or declined over
the past few months.
Stronger
than expected economic data in the U.S. and Europe at the beginning of the year
has ebbed into lackluster real gross domestic product growth (RGDP) below 2.0%
year-to-date (YTD). Investor sentiment rages on as the bulls are running on a
narrower street. High quality bonds and U.S. Treasury bond (TSY) yields are
higher than they were prior to November 2016 but they are well below the yields
had in mid-January 2017. [More]