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Market Commentary

MARKET COMMENTARY  | 
March 2016
 |  FEATURING Matt Miller & Andrew H. Dougherty

Expect a Slow-Growth Transition Period for China

China affairs specialist Andrew Dougherty shares his growth outlook for China as it makes the transition from an investment-based economy to a service-based economy.

Watch Video (3:02)

MARKET COMMENTARY  |  January 2016

World Markets Review for 2015

Global stocks delivered essentially flat returns as investor enthusiasm for the U.S. economic recovery was offset by concerns over a sharp slowdown in China. Aggressive central bank stimulus measures continued to support markets in Europe and Japan, while the U.S. gradually stepped back from accommodative policies. Emerging markets stocks generally lagged their developed-market counterparts by a wide margin. Mergers-and-acquisitions activity reached a record high, fueled by cheap financing. 

Defensive stocks outpaced economically sensitive sectors. Health care and consumer staples stocks rallied, while energy and materials stocks plummeted amid falling prices for oil and other commodities. At the end of the year, the U.S. Federal Reserve raised interest rates for the first time in nearly a decade, setting the stage for tighter monetary policy in the years ahead. The U.S. dollar rose against the euro and most other currencies.

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MARKET COMMENTARY  |  January 2016

World Markets Review for Fourth Quarter 2015

Global stocks advanced amid surging M&A activity and a strong year-end rally in the technology sector. The Fed raised interest rates for the first time in nearly a decade, but cautioned that future rate increases would depend on the pace of U.S. economic growth. Conversely, central banks in Europe and Japan ramped up stimulus measures in an attempt to jumpstart lackluster economies. U.S. bonds fell and the dollar rose against the euro and the yen.

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MARKET COMMENTARY  |  December 2015

World Markets Review for November 2015

Global stocks produced mixed returns amid investor worries about sluggish economic growth and expectations for higher U.S. interest rates. European equities advanced on the promise of new monetary stimulus measures, however, U.S. stocks were flat and emerging markets retreated. Bonds also declined as Federal Reserve leaders indicated that a rate hike is likely in December. The dollar rose sharply against the euro and the yen.

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MARKET COMMENTARY  |  November 2015

World Markets Review for October 2015

Global stocks rallied as central bank stimulus and rising M&A activity helped offset ongoing concerns about a slowing world economy. Energy and materials stocks led markets higher amid signs of stabilization in commodity markets. Information technology stocks also advanced on better-than-expected earnings from some bellwether companies. Bonds were generally flat, and the U.S. dollar rose against the euro and the yen.

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MARKET COMMENTARY  |  October 2015

World Markets Review for Third Quarter 2015

Global stocks tumbled amid increasingly alarming signs of an economic slowdown in China and uncertainty over U.S. monetary policy. Energy and materials stocks plummeted on worries about declining global demand for commodities. Defensive sectors, including consumer staples and utilities, generally held up better than cyclical stocks. Government bonds rallied and the U.S. dollar slipped against the euro and the yen. 

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MARKET COMMENTARY  |  September 2015

Fed Rate Decision: Near-Zero For Now, But Higher Soon?

  • The Federal Reserve has decided to keep interest rates close to zero, as concern about global economic conditions cast a shadow over an otherwise fairly bright outlook for the U.S. economy.
  • Looking forward, the Fed is expected to raise rates gradually, and an increase of 0.25%, for example, would be unlikely to have a significant impact on the economy.
  • Over time, higher interest rates can be beneficial for bond investors, enabling reinvestment in issues offering higher yields.
  • Rising rates have a varied impact on stocks. Selective investors who emphasize company-specific research should continue to find attractive longer term income and return opportunities.

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MARKET COMMENTARY  |  September 2015  |  FEATURING Timothy D. Armour & Robert W. Lovelace

Q&A With Portfolio Managers Tim Armour and Rob Lovelace

Perspective on Recent Market Selloff Triggered by China Woes

Global stocks have tumbled in recent days amid investor concerns about slowing economic growth in China. A sharp decline in Chinese stocks and a surprise currency devaluation have further stoked fears that the outlook for China is deteriorating, and events there could hurt its global trading partners, including Japan, Europe and ultimately the United States. China lowered interest rates and eased reserve requirements on banks in an attempt to calm investors and stimulate the economy. Against this backdrop, portfolio managers Tim Armour and Rob Lovelace share their thoughts on the unfolding events:

  • China now accounts for roughly 15% of the world’s gross domestic product and therefore has a greater impact than ever before on the global economy.
  • The most significant catalyst of the selloff was China’s unexpected decision to devalue its currency, delivering a shock to financial markets.

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MARKET COMMENTARY  |  September 2015

World Markets Review for August 2015

Global stocks plummeted as fears that China’s economy may be weaker than previously expected hit every sector of the markets. Financial and consumer discretionary stocks fell the most, particularly those with high exposure to Asia. Defensive sectors, such as utilities and telecommunication services, fared somewhat better. High-grade bonds were essentially flat amid concerns about rising U.S. interest rates. The dollar lost ground against the euro and the yen. 

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MARKET COMMENTARY  |  August 2015

World Markets Review for July 2015

Global stocks advanced amid improving economic data in the United States and an easing of the Greek debt crisis. Defensive sectors led markets higher as consumer staples, health care and utilities stocks rallied. Emerging markets stocks declined, weighed down by a sharp drop in Chinese shares and falling commodities prices. High-grade bonds gained from a flight-to-safety trade. The U.S. dollar rose against the euro, the yen and most other currencies.

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MARKET COMMENTARY  | 
July 2015
 |  FEATURING David Carpenter

Bullish on U.S. Despite Headwinds From Europe, China

A portfolio manager discusses his investment strategy in light of headwinds from Europe, China and the oil markets that pose a threat to the momentum of U.S. investing.

Watch Video (2:12)

MARKET COMMENTARY  |  July 2015

World Markets Review for Second Quarter 2015

Global stocks produced mixed returns as signs of improving economic growth were offset by fears of rising interest rates and a worsening debt crisis in Greece. Telecommunications stocks proved to be a bright spot, driven higher by M&A activity, while the rate-sensitive utilities sector fell the most. Emerging markets stocks advanced, supported by monetary easing in China. Bonds declined and the dollar slipped 4% against the euro.

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MARKET COMMENTARY  | 
June 2015
 |  FEATURING Richmond Wolf

A Renaissance for Health Care, but Can Economy Keep Up?

An investment analyst discusses the great strides seen in health care innovation and outcomes in recent years, but wonders whether the U.S. economy can support the proliferation of new drugs soon to be on the market.

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MARKET COMMENTARY  | 
June 2015
 |  FEATURING Darrell Spence

U.S. Economy on a Roll

An economist shares his positive outlook for the U.S. economy, given the low debt burden, upswing in housing activity and business investment, and other factors.

Watch Video (1:40)

MARKET COMMENTARY  |  June 2015

World Markets Review for May 2015

Global stocks managed a slight gain as investors reacted to mixed reports about the pace of worldwide economic growth. Technology and health care stocks rallied, while the energy sector continued to feel the impact of volatile oil prices on corporate earnings. Japanese stocks advanced on improving economic data. Emerging markets declined amid fears of higher U.S. interest rates. Bonds declined and the dollar rose against the euro and the yen.

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MARKET COMMENTARY  | 
May 2015
 |  FEATURING Anne Vandenabeele

How Abenomics Can Help Japan

An economist outlines four ways in which Abenomics is designed to help the Japanese economy and assesses the likelihood of long-term success.

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MARKET COMMENTARY  | 
May 2015
 |  FEATURING Darrell Spence

Oil Prices a Boon for U.S. Economy

An economist discusses why he sees the recent drop in oil prices as good news for the U.S. economy, despite widespread macroeconomic weakness overseas.

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MARKET COMMENTARY  |  May 2015

World Markets Review for April 2015

Global stocks rose modestly amid a strong rally in the energy sector. Rising oil prices, surging M&A activity and central bank stimulus measures helped to support world stock prices despite a slowdown in U.S. economic growth during the first quarter. Emerging markets rallied as market observers pushed back the timing of an increase in interest rates by the Federal Reserve to later in the year. Bond markets declined and the dollar lost ground against the euro, the pound and most other currencies.

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MARKET COMMENTARY  |  April 2015

World Markets Review for First Quarter 2015

Global stocks advanced amid rising M&A activity, heightened central bank stimulus measures and signs of renewed economic growth in Europe and Japan. Health care stocks enjoyed a strong rally, driven by several large acquisitions, while the energy sector lagged as oil prices continued to slide. U.S. bonds rallied, with investors favoring them for their relative value as yields in Europe and Japan touched record lows. The dollar rose sharply against the euro and most other currencies.

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This material is intended for use by financial professionals or in conjunction with the advice of a financial professional.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing. 

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Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and not to be comprehensive or to provide advice. 

Past results are not predictive of results in future periods.