Global Investment Outlook and Strategy
July 10, 2018
The MSCI World Index return was slightly negative and U.S. equities moved higher in June, supported by accelerating economic growth and improving corporate earnings. The U.S. outperformed most major regions of the world in the month as investors rotated into areas perceived to be less impacted from the threat of a global trade war and U.S.-centric, defensive, cyclically immune tech, and/or bond proxy stocks outperformed during the month as trade tensions intensified. We believe trade concerns have produced attractive investment opportunities and remain optimistic that pragmatism will prevail before serious economic harm can occur. The current U.S. economic expansion remains underpinned by a virtuous cycle of improved confidence and spending. Real GDP growth is poised to rebound sharply to an annualized pace of about +3.5 percent in the second calendar quarter of 2018 from +2.0 percent in the first quarter, driven by gains in consumer spending, fixed investment, and private inventories as well as by a reversal in seasonal adjustment factor distortions. We continue to believe a “barbell” approach provides a balanced risk-reward profile for equity portfolios as the economy remains vulnerable to external shocks. We are also more positive on the energy sector (including refiners) due to spending discipline, increasing dividends, and stocks prices that reflect oil in the low $60/barrel range. Funds emphasizing longer duration bonds such as taxable and tax-exempt municipal securities performed particularly well, while funds with exposure to foreign bonds have lagged due to the relative strength of the dollar.
For more details, including a longer discussion on the possible threat of global asset bubbles, please see Sit Investment Associates’ April 2018 Global Investment Outlook and Strategy paper. Click here: Global Outlook and Strategy (Adobe Acrobat) or e-mail us at: email@example.com.
MMAF Has Awarded Over 16,500 Grants
Since its inception in 2005, Minnesotan’s Military Appreciation Fund (MMAF) has awarded over 16,500 grants totaling over $10.5 million to Minnesota military personnel and their families. MMAF is a non-partisan, non-political 501(c)(3) non-profit corporation. It is a statewide fundraising initiative by the citizens of Minnesota. Its mission is to say “thanks” to Minnesota service members and their families by providing cash grants to those who are making sacrifices in the defense of our freedoms in combat zones around the world.
The tragedy of 9/11 compelled the late Eugene C. Sit, founder of Sit Investment Associates Inc., to create MMAF in order to thank and give back to Minnesota service members. Sit Investment Associates Inc. continues to support the efforts of MMAF.
To donate and learn more about Minnesotans’ Military Appreciation Fund, please visit the website at www.thankmntroops.org.