Market Review

Monthly Market Commentary from ING Investment Management.

• Market Review: April 2012: Austerity Bites
  Eight of the 17 euro zone nations currently are in recession; the region as a whole sidestepped this condition by only the slimmest of margins after reporting zero growth for the first quarter. Meanwhile, recent political developments and changes in policymaker rhetoric suggest that resistance to the German-championed age of austerity is mounting in the currency bloc. In contrast, the pro-growth path the U.S. followed out of the Great Recession has thus far provided a smoother trip, though softness in recent data has some fearful of another bout of the spring/summer economic doldrums.
• Market Review: March 2012: Unringing the Bell
  Three years after the markets’ 2009 nadir, domestic equities have rallied to erase most if not all of their losses — the S&P 500 has clawed its way back to 2008 levels, and the Nasdaq hasn’t seen its current surroundings since the early 2000s — and risk assets of all types and domiciles have followed suit. Though policymakers continue to work to quell the echoes of the financial crisis, an early-April selloff stood as a stark reminder of the still-precarious state of the global economy and the oft-visceral reaction markets can have to bad news.
• Market Review: First Quarter 2012: Talking With Fireworks
  Quieting the naysayers, equity markets delivered an explosive start to 2012. After its best first quarter since 1998, the S&P 500 has clawed its way back to 2008 levels; meanwhile, the Nasdaq is above 3,000 for the first time since end-2000. Risk assets of all types and domiciles also headed skyward, propelled by easing global macroeconomic risks, strong U.S. data and policymaker intervention. Notably, the sharp day-to-day swings that had characterized market activity for much of last year abated during the quarter.
• Market Review: February 2012: History Sticks to Your Feet
  After a robust February extended January’s rally, 2012’s start bears a strong resemblance to 2011’s — for better and for worse. Fueled by an improving U.S. economy, risk assets began 2011 with two good months before being derailed by, among other things, sovereign uncertainty and spiking oil prices. While these factors continue to loom, the debt restructuring in Greece suggests markets may be able to kick loose the dirt of history.
• Market Review: January 2012: Any Hopeful Thoughts Arrive
  After a tumultuous 2011, a sense of optimism appeared to have swept over the financial landscape with the dawning of the new year. Buoyed by easing global macroeconomic risks and strong domestic data, the S&P 500 delivered its best January since 1997 and risk assets of all kinds surged. Notably, the sharp day-to-day swings that had characterized market activity for much of last year — “risk on/risk off”, anyone? — abated, replaced by a newfound constancy and hope that the most pressing global economic issues were moving toward resolution.
• Market Review: December 2011: Different Drum
  December data put an exclamation point on what proved to be an unexpectedly strong quarter for the U.S. economy, dismissing any thoughts that a new recession was near. Europe continues to march to its own, slower beat, however, as policymakers grapple with the region’s fiscal issues in the face of a tottering economy.
• Market Review: Fourth Quarter 2011: When We Two Parted
  The U.S. economy showed unexpected strength during the fourth quarter, putting to rest — for now, at least — the summertime fears that a new recession was imminent. No such change in trajectory was evident in Europe, however, as policymakers continued to grapple with the currency bloc’s fiscal crisis while its economy slowed to a crawl.
• Market Review: November 2011: The Ties That Bind
  Acknowledging that the status quo was untenable, Europe opted to move closer together before it was torn apart. Conversely, the chasm between the two major political parties in the U.S. is as wide as ever, most recently evidenced by the abject failure of the Congressional “supercommittee” on deficit reduction. Despite the ongoing policy paralysis in Washington, however, the U.S. economy is showing new signs of momentum.
• Market Review: October 2011: Boing!
  Equity markets staged a furious rally in October, bouncing back from a brutal third quarter on hopes that euro zone policymakers would finally be able to contain the region's debt crisis. While signs of resilience in the U.S. economy and another quarter of strong corporate earnings provided additional sources of momentum, headlines out of Europe likely will continue to play the role of gravity for the near future, either helping to extend the markets' ascent or hastening their return back to earth.
• Market Review: September 2011: Driving the Dynamite Truck
  Equity markets continued their multi-month slide in September, as investors flocked to safer assets in light of the ongoing debt crisis in the euro zone and fears that the global economy may be on the precipice of a new recession.
• Market Review: Third Quarter 2011 - Suffering Season
  Those hoping for a relaxing summer were profoundly disappointed. After lawmakers brought the U.S. to the brink of default, a suitably unimressed Standard & Poor's cut the nation's credit rating and introduced unprecedented volatility to the financial markets.
• Market Review: August 2011: Bend or Break
  Battered by disasters both natural (a hurricane and an earthquake struck the east coast) and manmade (a U.S. sovereign credit rating downgrade that can be traced directly to the dysfunctional state of Washington), major equity indexes posted their worst August in a decade.
• Market Review: July 2011: The Pace is Glacial
  A distinct slowness pervades our system. Washington takes months to raise the debt ceiling, something that has been done with little fanfare 75 times in the past 40 years. Policymakers in Europe spend months dragging their feet over a Greek bailout in 2010, only to approach a second bailout with similar disinterest just over a year later. Economic activity meanders along momentum-less. Only the markets seem able to act with any sort of urgency; unfortunately for equity investors, this has meant a rapid decline in portfolio values across in recent months, especially in late July and early August.
• Market Review: Second Quarter 2011 - Stop Me if You Think You’ve Heard This One Before
  In many ways, the second quarter of 2011 bore a strong resemblance to its 2010 counterpart, with the U.S. mired in an economic soft patch, the euro zone in a Greece-centered crisis and China trying to engineer a soft landing for its economy. One noteworthy distinction between the two periods, however, was the reaction of markets; while equities sold off sharply during the second quarter of 2010 as investors took shelter in Treasuries, stocks held their own in 2011.
• Market Review: June 2011: The Soft Parade
  A succession of disappointing economic data released throughout June pointed to a U.S. economy that was marching in place. Meanwhile, sovereign debt concerns continued to dampen risk appetites, as the euro zone fumbled for an answer to its periphery problems and the U.S. inched closer to a brink of its own without any sort of resolution on the debt ceiling. Equity markets remained mired in the slump that took hold in May, while a late-month selloff sent Treasury yields higher on the long end of the curve.
• Market Review: May 2011: Welcome to the Terrordome
  With a May 1 pre-dawn raid on a compound less than 100 miles outside of Pakistan’s capital city, U.S. Navy SEALs killed Osama bin Laden, eliminating the face — if not the threat — of global terrorism. Those hoping this historic accomplishment might inspire a feel-good equity rally were soon disappointed.
• Market Review: April 2011: Without Blinking
  In April, markets stood unfazed before the usual headwinds, choosing instead to focus on corporate profi ts. With S&P 500 companies reporting a sixth-consecutive quarter of double-digit earnings growth, equities turned in their best performance of 2011 and fi xed income assets of all types delivered positive returns.
• Market Review: March 2011: A Different Kind of Tension
  In March, an equity market that for the last several months had seemed nearly impervious to any sort of external shock was faced with a more harrowing threat in the form of the Japanese earthquake and tsunami. Markets sold off sharply in the immediate aftermath of the event, as investors grappled not only with a significant disruption to the world’s third-largest economy but also with reports of a Chernobyl-level catastrophe unfolding in the northeastern section of the island.
• Market Review: First Quarter 2011 - Keep Yourself Warm
  Though meteorologists would argue otherwise, for investors this was the most temperate winter in recent memory. With record snows blanketing many parts of the country, markets trudged forward through headwinds old and new — everything from geopolitical discord to rising commodity prices to disasters both natural and manmade — to keep the rally in risk assets alive for another quarter.
• Market Review: February 2011: Little Discourage
  Anti-government fervor continued to spread throughout the Middle East/North Africa region in February, most notably into oil-producing Libya. Though heightened geopolitical tensions and rising oil prices resulted in a few white-knuckle trading days toward the end of the month, the bulls were undeterred. Developed equity markets followed a strong January with an even stronger February, as global economic momentum continued to build and yet another robust earnings season drew to a close.
• Market Review: January 2011 - Fire in Cairo
  Investors shook off the threats posed by rising tensions in the Middle East — culminating in mass protests in Cairo that ultimately forced the resignation of Egyptian President Mubarak — to deliver one of the best Januaries in years for equities. While positive economic momentum drove buying in the developed markets, emerging market assets fell out of favor during the month, as concerns about infl ation and central bank policy responses moved investors to take some money off the table.
• Market Review: Fourth Quarter 2010 - In Medias Res
  As the year drew to a close, investors were in a celebratory mood. A number of equity markets worldwide finished December at or near 2010 highs after a strong fourth quarter. Though most fixed income assets saw limited success in the quarter given rising rates, full-year returns were robust. However, despite the general sense of optimism that currently exists, two of 2010’s most compelling stories — the sluggish economic recovery in the U.S. and the sovereign debt issues in the euro zone — remain only partially told. How these narratives play out in 2011 will have a significant impact on market performance.
• Market Review: December 2010 - Happiness Is All the Rage
  Data released throughout December suggested a firming of the U.S. economic recovery, while fiscal stimulus via tax legislation gave prognosticators increased confidence that the upswing was sustainable. Equity markets responded in kind, with many finishing the year at or near 2010 highs despite continued sovereign debt difficulties in the euro zone, now focused on Portugal. Yields on Treasuries moved mostly higher given the more sanguine economic outlook.
• Market Review: Falling on a Bruise
  While the sharp sting of the Greek bailout may have faded, the ache remains. Ireland was the latest reminder of the wounds inflicted by the euro zone’s periphery, as it requested a bailout and left investors wondering which country would be next to fall.
• Market Review: October 2010: Waiting on the Guns
  October saw the release of relatively upbeat economic data reports along with another batch of strong earnings out of corporate America. Yet it was the anticipation of early November’s events — namely, the launch of another round of quantitative easing by the Fed and midterm elections — that held investors in thrall for most of the month.
• Market Review: September 2010 - Learned to Surf
  Throughout August, stocks were pummeled by wave after wave of disappointing economic data. September was a different story, however; although economic data in the waning days of summer was mixed at best, equity markets glided through the slop to post awesome returns.
• Market Review: Third Quarter 2010 - Constructive Summer
  While data flow during the third quarter continued to highlight cracks in the economic recovery’s foundation, investors found something to build on. Equity performance in the period catapulted all broad U.S. market metrics back into positive territory for the year; however, emerging markets continued to outperform.
• Market Review: August 2010: Fall in August
  Autumn’s chill was felt by the equity markets ahead of the calendar, as continued concerns over global growth sent investors to the comfort of safer investments. Stocks were down globally, while U.S. Treasuries rallied sharply.
• Market Review: July 2010 - Uncertain Smile
  While it remains to be seen whether “unusually uncertain” will take its place in the annals of such prescient and poetic Fed chair utterances as “irrational exuberance,” July’s dynamics were certainly unexpected given the particularly poor conditions for risk assets that prevailed in May and June. Although economic data in the United States continue to point to a moderate-at-best recovery, signs of life in Europe combined with another quarter of surging corporate profits to encourage investors back into risky assets.
• Market Review: June 2010 - Good News for People Who Love Bad News
  Concerns about the frailty of the global recovery dominated market activity in June. Although there was no Greece-like bombshell to send skittish investors running for cover, confidence was slowly eroded by a persistent flow of unmet expectations. Meanwhile, Beijing appears to be making good on its promise to subdue its sizzling economy, while additional European nations jumped on the belt-tightening bandwagon, to the chagrin of those who think the global economy is not quite ready for widespread fiscal discipline.
• Market Review Second Quarter 2010: Gimme Shelter
  In a quarter that conservatively could be described as eventful, investors sought refuge in safer investments. Beyond introducing such terms as flash crash, Eyjafjallajökull and Deepwater Horizon into the common parlance, the second quarter witnessed an intensification of the European sovereign debt crisis, increased signs of a government-engineered slowdown in China and data indicative of lackluster economic momentum in the U.S. In this period of extreme risk aversion, U.S. Treasuries were the topperforming asset class, while gold rallied to all-time highs.
• Market Review: May 2010 - Repeater
  May ended more or less the way it began but amplified, as concerns about euro zone economic stability overrode continued improvements in the global economic landscape to an increasingly deleterious impact on risky assets.
• March 2010 Market Review: Champagne from a Paper Cup
  Equity markets worldwide celebrated the one-year anniversary of the current bull market by closing March and the first quarter at new 18-month highs.
• Market Review First Quarter 2010: Steadier Footing
  Despite the continued frothy equity market and signs of positive momentum in the economic recovery, certain headwinds — including the continued struggles of the weakest euro zone members, debt-saddled consumers and municipalities in the U.S., weakness in many housing markets worldwide — have kept the ebullience in check.