American Funds ®

Market Commentary

MARKET COMMENTARY  |  August 2015  |  FEATURING Rob Lovelace & Timothy D. Armour

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, and developed markets appeared to stabilize midweek. 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.

Continue reading...

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.

Continue reading...

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.

Continue reading...

MARKET COMMENTARY  | 
June 2015
 |  FEATURING Rich 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.

Watch Video (2:03)

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.

Continue reading...

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.

Watch Video (3:35)

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.

Watch Video (2:14)

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.

Continue reading...

MARKET COMMENTARY  | 
January 2015
 |  FEATURING James F. Rothenberg & Kevin G. Clifford

Jim Rothenberg on the Year Ahead

A portfolio manager discusses the U.S.’s return to world economic dominance, the positive implications of a rise in interest rates, how he sees today’s market volatility as a plus, the importance of maintaining equity exposure outside the U.S. and the potential benefits of opening a 529 college savings plan.

Watch Video (10:49)

MARKET COMMENTARY  | 
August 2014
 |  FEATURING Jonathan Knowles

Despite Challenges, Investment Opportunities Abound in Africa

Portfolio manager Jonathan Knowles discusses how investing in Africa presents challenges as well as significant opportunities.

Watch Video (2:10)

MARKET COMMENTARY  |  August 2014  |  FEATURING Jonathan Knowles

Finding Opportunities in the U.S. and Health Care

Exhibit 1: Many e-commerce companies have great growth potential as online sales are still a small percentage of total retail sales.

Source: U.S. Census Bureau. Data reflect quarterly estimates adjusted for seasonal variation but not for price changes.

Portfolio manager Jonathan Knowles shares his views on building concentrated portfolios and why he likes health care stocks. He talks about how U.S. companies are among the most disciplined in their capital allocation and why many of them tend to be great long-term investments. He also discusses:

  • What's still attractive in the U.S., despite the significant market run-up
  • The potential for banks in Ireland and Greece
  • Opportunities in India, Nigeria and South Africa
  • Areas of health care showing the greatest innovation
  • Favorable economics and pricing power of tobacco companies

Many investors believe that valuations in the U.S. are full. How do you currently view the U.S. market, especially relative to other markets on a global basis?

Continue reading...

MARKET COMMENTARY  | 
August 2014
 |  FEATURING Jonathan Knowles

Identifying Innovations in Health Care

Capital Group portfolio manager Jonathan Knowles discusses the opportunities for investing in global pharmaceutical companies.

Watch Video (2:15)

MARKET COMMENTARY  | 
August 2014
 |  FEATURING Jonathan Knowles

Investing in the U.S. as a Global Manager

Capital Group portfolio manager Jonathan Knowles discusses innovative companies such as Amazon, Google and LinkedIn, and where the opportunities are in the U.S. from a global perspective.

Watch Video (3:28)

MARKET COMMENTARY  | 
August 2014
 |  FEATURING Jonathan Knowles

On Running Concentrated Portfolios of 25 to 30 Stocks

Capital Group portfolio manager Jonathan Knowles discusses his focus on free cash flow and return on capital, and how they tie in with having a very concentrated portfolio.

Watch Video (1:15)

MARKET COMMENTARY  | 
August 2014
 |  FEATURING Jonathan Knowles

Outlook for India Is Better Following Elections

Capital Group portfolio manager Jonathan Knowles discusses the opportunities in India with the election of new Prime Minister Narendra Modi.

Watch Video (2:45)

MARKET COMMENTARY  |  July 2014  |  FEATURING Timothy D. Armour

Mid-Year Outlook: Can Stocks Sustain 2014 Gains?

World Market Returns (May 30, 2009 — May 30, 2014)

Exhibit 1: Stocks have produced remarkable returns during the past five years, rebounding from the financial crisis. However, investors should not expect double-digit gains to be the norm going forward.

Sources: RIMES, Capital Group.
Returns in U.S. dollars.

Portfolio manager Tim Armour discusses equity investing, the European economic recovery, his outlook for interest rates and pockets of value he sees in the market.

It has been more than five years since the financial crisis. We’ve experienced strong equity market returns, but a lackluster economic recovery. At the midpoint of 2014, where do you think we are in the recovery process and what is your outlook?

Continue reading...

MARKET COMMENTARY  | 
June 2014
 |  FEATURING Andrew H. Dougherty

China's Urbanization Plan a Chicken-or-Egg Proposition

A China affairs specialist details China’s urbanization plan and explains the nation’s property market problems — resulting in cities filled with empty buildings — as a matter of supply and demand.

Watch Video (2:15)

MARKET COMMENTARY  | 
June 2014
 |  FEATURING Andrew H. Dougherty

Debunking Some Misconceptions About China

A China affairs specialist details five key points that are commonly misunderstood about China, including its business cycles; its headwinds; and the importance of property, policy and politics.

Watch Video (3:59)

MARKET COMMENTARY  | 
June 2014
 |  FEATURING Darrell Spence

Drag-Free U.S. Economy Should See Growth Rise

An economist discusses the potential for the U.S. economy to break free of its sluggish post-recession growth now that headwinds such as government retrenchment and a weak European export picture have subsided.

Watch Video (2:41)

MARKET COMMENTARY  | 
June 2014
 |  FEATURING Jens Søndergaard

Europe Continues on a Slow-Growth Trajectory

An economist offers his slow-growth outlook for a still-deleveraging Europe and sees some threats that could derail the region from its post-recession progress.

Watch Video (3:32)

MARKET COMMENTARY  | 
June 2014
 |  FEATURING Darrell Spence

Fed Tapering Likely to Push Interest Rates Upward

An economist anticipates a gradual rise in U.S. interest rates over the next year or two, given the Fed’s policy of tapering off its purchases of Treasury and mortgage securities. However, low inflation should keep rising rates in check.

Watch Video (2:16)

MARKET COMMENTARY  | 
June 2014
 |  FEATURING Jens Søndergaard

Some European Companies to Benefit From Restructuring

An economist maintains that the best investment opportunities in Europe are companies that can benefit from the structural changes taking place in the region.

Watch Video (1:13)

MARKET COMMENTARY  | 
June 2014
 |  FEATURING Darrell Spence

U.S. Equity Market Hitched to Earnings Growth

An economist looks at today’s U.S. equity valuations in light of low current interest rates and an accelerating economy, and concludes that earnings — and by extension, returns — will continue to rise.

Watch Video (2:19)

MARKET COMMENTARY  | 
May 2014
 |  FEATURING Will Craig

Alibaba in E-commerce Driver's Seat

Investment analyst Will Craig discusses how China’s e-commerce giant Alibaba has come to dominate the industry while still a private company.

Watch Video (2:20)

MARKET COMMENTARY  | 
May 2014
 |  FEATURING Will Craig

China Leapfrogging Offline Retail

Investment analyst Will Craig explains the conditions in China that will allow e-commerce to grow at a faster clip there than in the U.S.

Watch Video (1:32)

MARKET COMMENTARY  | 
May 2014
 |  FEATURING Will Craig

E-commerce Booming in Emerging Markets

Investment analyst Will Craig discusses the role of the smartphone in accelerating the evolution of e-commerce in the emerging markets.

Watch Video (1:36)

MARKET COMMENTARY  | 
May 2014
 |  FEATURING Will Craig

Online Efficiencies Driving Profits

Investment analyst Will Craig discusses benefits that retailers can gain by bringing their operations online, including more reliable customer data and lower costs.

Watch Video (2:44)

MARKET COMMENTARY  | 
May 2014
 |  FEATURING Will Craig

Online Upending Traditional Retail

Investment analyst Will Craig discusses the shrinking list of traditional retail categories that are no longer vulnerable to penetration by e-commerce.

Watch Video (1:47)

MARKET COMMENTARY  | 
May 2014
 |  FEATURING Will Craig

Research SWAT Teams Tackle Big Topics

Investment analyst Will Craig illustrates how research clusters, such as the Internet-industry SWAT team, bring a collaborative, multipronged approach to a research coverage area.

Watch Video (1:17)

MARKET COMMENTARY  |  April 2014  |  FEATURING Darrell Spence

U.S. Economic Outlook Lifted by Favorable Tailwinds

Faster GDP Growth Should Lead to Stronger EPS Growth

Sources: Bureau of Economic Analysis, Standard & Poor’s
Quarterly data through December 31, 2013.

Economist Darrell Spence discusses his expectations for accelerating growth in the U.S.

Despite recent signs of a slowdown in activity, the U.S. economy remains in expansion mode and growth is likely to accelerate in the months ahead, says Capital Group economist Darrell Spence. Severe weather has clearly had an impact in recent months. However, taking a step back and looking at the big picture, the U.S. economic recovery remains on track, thanks to pent-up housing demand, accommodative monetary policy, improving fiscal conditions at state and local governments, a significant federal budget compromise, and the end of a long-running recession in Europe that had dented U.S. exports. 

Continue reading...

  • Ukraine is facing significant political and financial challenges amid a fragile economic backdrop and twin deficits. Investors should expect elevated market and currency volatility.
  • The political situation is fluid. Currently, we anticipate that the longer term impact on global equity and bond markets should be limited. Similarly, there appears to be only a relatively small risk of significant contagion spreading to other developing economies.
  • Russian economic growth could decelerate further, which may pressure company earnings and lead to a moderately deteriorating credit situation. That said, Russia’s overall financial metrics remain sound and arguably a significant degree of uncertainty is reflected in Russian debt prices.

Continue reading...

MARKET COMMENTARY  | 
February 2014
 |  FEATURING Brad Barrett

Google Does It Again — With Android

American Funds investment analyst Brad Barrett discusses how Google’s culture of continuous improvement and innovation influenced its business model for entering the mobile phone business with Android.

Watch Video (3:08 )

MARKET COMMENTARY  | 
February 2014
 |  FEATURING Darrell Spence

How Fed Tapering Could Impact Bond Market

American Funds economist Darrell Spence estimates the range of increase in U.S. bond yields given the gradual approach to QE tapering expected from the Fed and today’s low rate of inflation.

Watch Video (1:35)

MARKET COMMENTARY  | 
February 2014
 |  FEATURING Brad Barrett

Netflix and the Power of Scale

American Funds investment analyst Brad Barrett explains how Netflix has succeeded in gaining home entertainment industry share by employing a business model based on achieving scale.

Watch Video (2:25)

MARKET COMMENTARY  | 
February 2014
 |  FEATURING Brad Barrett

Three Keys to Innovation Success

American Funds investment analyst Brad Barrett illustrates why a technological advancement needs the proper business model and timing to market, in addition to the original innovative idea, in order to succeed.

Watch Video (1:21)

MARKET COMMENTARY  | 
February 2014
 |  FEATURING Darrell Spence

U.S. Economy Ready to Break Out

American Funds economist Darrell Spence asserts that the U.S. economy is nearing the end of its deleveraging cycle and points to fading headwinds in suggesting that growth this year could exceed 3% for the first time since the end of the recession.

Watch Video (2:47)

MARKET COMMENTARY  | 
February 2014
 |  FEATURING Brad Barrett

What Made Google Google

American Funds investment analyst Brad Barrett explains how Google improved upon existing search engines and developed a business model that ensured its domination of the search business.

Watch Video (2:38)

MARKET COMMENTARY  |  January 2014

World Markets Review for Fourth Quarter 2013

Stocks ended the year with strong gains in developed economies, reaching historic highs in several key markets. Central bank stimulus, an accelerating U.S. economy, and improved corporate earnings supported higher valuations in the U.S, Europe and much of Asia. Emerging markets trailed developed markets, hampered by concerns about U.S. monetary policy. Information technology stocks rallied around the world, while rising interest rates weighed on the utilities sector. U.S. Treasury bonds declined as rates reached a high point for the year and investors moved out of safe-haven assets. The dollar fell 2% against the euro but rallied 7% versus the yen.

Continue reading...

MARKET COMMENTARY  |  January 2014

World Markets Review for 2013

Stocks enjoyed a strong rally in developed markets, supported by central bank stimulus, improving economic activity and reasonably good earnings growth. Emerging markets equities and most fixed-income markets declined as the U.S. Federal Reserve contemplated and later implemented a reduction in its massive bond-buying programs known as quantitative easing. The Fed action drove interest rates higher, pressuring bond markets and reducing demand for higher risk assets. Gold and silver prices plummeted as concerns about inflation waned.

Most sectors enjoyed double-digit gains for the year, led by consumer discretionary and health care stocks. Telecommunication services stocks advanced amid resurgent M&A activity. Corporate bond issuance soared as companies sought to lock in low borrowing costs. The year closed on a positive note as several key stock market indices reached all-time highs in December. U.S. equities rose 32%, the largest gain since 1997.

Continue reading...


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.   

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.  

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. The information provided is intended to highlight issues and not to be comprehensive or to provide advice. Any reproduction, modification, distribution, transmission or republication of the content, in part or in full, is prohibited.