Markets "in a Nutshell" for December 5, 2017Dec 05, 2017
What foreign country’s investors are buying the most U.S. commercial real estate?
Answer to the quiz at the end of this post.
Investment Week at a Glance
Stocks finished mostly higher for the week. The Dow Jones Industrial Average was up 2.86%, the S&P 500 rose 1.53%, the New York Stock Exchange Composite (2,000 stocks) was up 1.55% and the average investors index (Value Line Index) was up 1.48%. Foreign stocks (DJ Global ex U.S.) were down 1.37%. Bond prices were lower for the week, pushing the yield on the 10-year U.S. Treasury up 2 basis point to finish the week at 2.36%. (Data sources: Barron’s Financial, Wall Street Journal)
Solid Economic Data Continues to Propel Stocks
Economic data in the U.S. was positive across the board as November came to an end. Better-than-expected results were seen in: Initial jobless claims, GDP growth, consumer confidence, new home sales, and personal income.
The financial services sector outperformed due to Congress making progress on the corporate tax cut bill and because of positive comments regarding deregulation made by incoming Federal Reserve Board Chairman Jerome Powell. However, technology stocks (especially shares of semiconductor makers) underperformed as investors rotated out of tech into value-oriented investments.
In the fixed-income markets, emerging markets debt and U.S. high-yield bonds outperformed as bond investors’ appetite for risk increased. In contrast, long-duration U.S. Treasury securities underperformed as interest rates rose.
Global Stocks Move Higher
International data was mixed for last week. While China posted better-than-expected manufacturing PMI, industrial production in Japan and mortgage approvals in the UK disappointed. Global stocks rose during the week.
Overseas, European financial shares rallied—helping Europe and developed markets overall outperform for the week. Emerging markets lagged, led by China on news that the Chinese government is tightening access to credit.
b) Canada – According to research from JLL Research and Real Capital Analytics. During the first half of 2017, Canada accounted for 30% of all foreign investment in U.S. commercial real estate.