January 2nd – Weekly Update

  • It was a strong year for U.S. equities as the S&P 500 Index returned 22% (YTD total return). Small- and mid-cap U.S. stocks also posted strong returns for the year, as the Russell 2000 Index and Russell MidCap Index returned 15% and 19%, respectively. Meanwhile, value stocks underperformed growth stocks across market capitalizations. From a sector perspective, technology stocks were the strongest performers in the U.S., while the telecom and energy sectors lagged.
  • Looking abroad, international developed stocks fared equally well as the MSCI EAFE Index returned 26% for the year. Emerging market stocks were the best performers, as the MSCI Emerging Markets Index posted a return of 38%.
  • Bonds also had a very strong year. Despite accelerating GDP, bond yields – which move in the opposite direction of prices – struggled throughout the year as global investors seeking yield kept up an insatiable demand for U.S. bonds, boosting prices. Safe haven long U.S. treasury bonds returned 9% for the year, while high yield was up 7.5%. Global bonds were also up, posting a 7% return (YTD total return). Other asset classes were also part of the party. Global REITS were up more than 10% and even gold enjoyed double digit returns up more than 12%.

CPWM Weekly Market Monitor (2017.12.29)