Twenty-three developed markets were down 0.1% on average and 16 are in a Confirmed Uptrend, the 48th week with a majority. Twenty-three emerging markets rose 0.7% on average and 18 markets are in a Confirmed Uptrend, the 29th week with a majority.
Author: Kenley Scott
Kenley Scott is a senior equity analyst and sector strategist covering the APAC region and the Energy sector. He is a member of the Global Focus List Committee, which approves all equity recommendations for developed, emerging, and frontier markets. Kenley also writes the Global Sector Summary, part of the Sector Strategy service, which identifies emerging sector strength and weakness across 46 countries every week. After working as a commodities broker, Kenley joined the firm in July 2006. He has a B.S. in Statistics from the University of California, Riverside and also holds a Series 65 securities license.
Global Retail Sector
European Markets Shifting Negative
Twenty-three developed markets were down 1.0% on average and 17 are in a Confirmed Uptrend, the 47th week with a majority. Twenty-three emerging markets rose 0.2% on average and 18 markets are in a Confirmed Uptrend, the 28th week with a majority.
U.S. Growth Continues to Outperform
Twenty-three developed markets were flat on average and 20 are in a Confirmed Uptrend, the 46th week with a majority. Twenty-three emerging markets rose 0.7% on average and 18 markets are in a Confirmed Uptrend, the 27th week with a majority.
Global Capital Equipment Sector
As terrorist acts increase around the world and tensions escalate between the U.S. and various rogue countries, the importance of bolstering military spending is one of the top priorities of the Trump administration. In May, Trump’s FY 2018 budget request for defense spending totaled $639B, including a base budget increase of $52.8B, or 10% more than Obama’s FY 2017 request. Defense stocks, including General Dynamics (GD), Lockheed Martin , Northrop Grumman (NOC), and Raytheon (RTN) rallied on the budget news, many of them breaking out to new highs. These stocks offer limited earnings growth in 2017, with the average in the mid-single digits, but their cash flow generation is healthy, increasing 10% on average in 2016 to support dividend yields of around 2% for each. In general, defense stocks have performed well for the year behind the expectations of higher military spending, not only in the U.S., but worldwide. According to the Stockholm International Peace Research Institute, global military spending in 2016 increased for the first time since 2011, reaching $1.7T, up 0.4% y/y.
Second Week of Global Losses as Distribution Rises
Twenty-three developed markets fell 0.7% on average and 21 are in a Confirmed Uptrend, the 45th week with a majority. Twenty-three emerging markets fell 0.5% on average and 18 markets are in a Confirmed Uptrend, the 26th week with a majority.
Volatility Picks Up in U.S., but Remains Near Historical Lows
Twenty-three developed markets fell 0.2% on average and 21 are in a Confirmed Uptrend, the 44th week with a majority. Twenty-three emerging markets rose 0.4% on average and 18 markets are in a Confirmed Uptrend, the 25th week with a majority.
Global Energy Sector
Energy stocks represent about 8% of total market capitalization in the Americas region. U.S. Energy stocks account for about three-fourths of this total. As such, we will focus on the current Energy sector in the U.S. as representative of the region.
As Markets Move Slightly Higher, a Look at Breadth of Gains in the U.S.
Twenty-three developed markets gained 0.5% on average and 21 are in a Confirmed Uptrend, the 43rd week with a majority. Twenty-three emerging markets were flat on average and 18 markets are in a Confirmed Uptrend, the 24th week with a majority.
Markets Brush Off Prior Week’s Volatility
Twenty-three developed markets gained 0.5% on average and 21 are in a Confirmed Uptrend, the 42nd week with a majority. Twenty-three emerging markets gained 0.4% on average and 18 markets are in a Confirmed Uptrend, the 23rd week with a majority.
