Market Action

• U.S. markets remained largely flat on the week as investors take a pause on the rally of the past several weeks. Volatility continues to stay muted as well.
• The Federal Reserve raised interest rates as expected this week. Members of the Fed are projecting up to 4 rate increases for 2017 but markets are skeptical, pricing in no more than 2.
• The dollar reached a 14-year high against the Euro and a basket of other currencies following the Fed rate increase. The dollar’s rise has had mixed results internationally, with emerging market stocks and currencies struggling but the Nikkei rallying 8 straight days.
• Japan is now the largest holder of U.S. bonds as China has been using reserves to support its currency. China’s holdings are at a six-year low.
• A slew of economic data out of China came in better than expected. Retail sales rose 11% as the Chinese consumer is keeping the economy afloat. Fixed asset investment and industrial activity also showed improvement.
• Gold has fallen 17% since its high in July on the heels of the Brexit vote. The metal sold off sharply following the Fed’s rate increase and is approaching a bear market.
• In an effort to tackle deep fiscal imbalances Brazil has passed a constitutional measure to freeze spending for nearly two decades. President Temer pushed for the law amidst his own legal troubles.

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