US economy gets a boost
With the US economy showing signs of improvement, the Federal Open Market Committee initiated its first rate hike of 2017. “The simple message is — the economy is doing well,” Chair Janet Yellen proclaimed.
A strengthening job market and rising prices reinforced the decision. As the US economy continues to strengthen, two additional rate increases are expected later this year. This expectation, combined with the announcement, caused the market to rally.
Europeans unfazed by Brexit (so far)
The European market soared (Euro STOXX +5.7%) last month despite the UK (FTSE 100 +1.1%) starting the formal proceeding of Brexit. That Brexit process only started at the end of March, but we expect ongoing negotiations to cause ongoing market volatility in Europe.
In Canada, the TSX(+1.3%) continued its upward march. Economic growth outpaced even the strong performance of 2016. The federal budget did not levy increased taxes on investors. The BoC maintained its interest rate policy.
Oil slides, gold loses its lustre
Meanwhile, we saw a weaker financial sector and falling oil and gold prices. Oil prices fell due to a build-up of US crude supplies. This added to concerns that the oil glut will not ease soon, undermining the effect of OPEC-led production cuts.
High yield bonds were flat thanks to falling oil prices, uncertainty over plans to boost fiscal spending and the revisiting of the U.S. debt ceiling debate. An additional factor: low spreads have hidden the risk of default.
WealthBar’s portfolios see positive results
Our portfolios continued to benefit from broad-based diversification, to deliver positive returns this month.