The last week has been a roller coaster for investors. After a huge selloff on Monday and Tuesday, the Dow turned on a dime and posted its best two day point gain in its more than 100 year history. The broader market S&P 500 was down 8.1% YTD as of Tuesday but gained 6.3% in the following two days, erasing much of the damage. That is why it is unfortunate to read that between 8/19 and 8/26 investors pulled an all-time record high out of global equity funds (according to EPFR Global data). Tuesday’s outflow alone was $19 billion, the second largest one day outflow since 2007. Investors without a plan panicked and tried to avoid further carnage but instead missed out on a spectacular rebound. The market volatility is not over. The U.S. economy is doing fine but global growth is fragile, oil company earnings are struggling and a Fed rate hike is looming. So if you don’t have a plan this would be the time to make one. Please re-read the Voya Global Perspectives™ special report, “Stick to Your Plan During the Market Correction”.
The Latest Market Commentary From Our Strategists
Weekly Commentary & Statistics
After a tumultuous week, U.S and European stock markets managed to close in the black. Asian markets staged a significant comeback from steep losses early in the week, but still finished down on the week. Gold rose modestly for the week, whereas oil posted a significant gain.
Monthly Commentary & Outlook
- Developed markets have demonstrated awe-inspiring resilience in the face of emerging market struggles.
- Emerging market currencies are plunging. U.S. monetary policy is partly to blame but the true culprit is China.
- U.S. interest rate hikes are likely to be gradual. Investors who exit bonds may miss income opportunities.
- Energy sector problems cloud the Q2 earnings season. It could be the first quarter of negative growth since Q3 2012.
- Despite China’s recent selloff, keep in mind that volatility may be rewarded.