Quarterly Update

Happy Independence Day!

With the first half of 2017 in the books, let's look at some of the returns from different areas of the global markets through last Friday.

The U.S. market performed well, quietly returning a solid 9.3% for the S&P 500. All major stock indexes were positive while small company stocks, and those with a "value" orientation, lagged during the first half. Large company "growth" stocks, and specifically tech stocks, took off before coming back to earth a bit near the end of the quarter.

Foreign stock markets outperformed the U.S. during the first half, with emerging markets (EM) bringing in almost 19% year-to-date. A historically volatile and diverse asset class, EM performance was mixed. India gained 16% while China and Brazil each grew by low single digits. Russia's major index, the RTS, dropped 13%.

Foreign developed markets also performed well, with solid gains of about 7% from Germany and Italy, and France grew by about 5%. Somewhat surprisingly, even the U.K. was up about 8% as the country continued to deal with Brexit negotiations. But smaller markets grew rapidly, with Latvia tipping the scales at 32% growth, followed by the likes of Argentina, and emerging markets like Turkey, and Greece, each growing by almost 30%.

The bond market in the U.S. eked out a positive return of about 2.3% during the first half, as short-term rates were raised twice by the Fed and some investors continued to favor longer-term bonds. Municipal bonds also performed well, gaining by about 4.2%, and high-yield (previously called junk bonds) grew by almost 5%. Foreign bonds also performed decently.

All told, the first half of 2017 was pretty solid for the global stock and bond markets. Here's a roundup of some other interesting benchmarks:

• Oil (WTI): $46 per barrel, down from $54 at year-end
• Gold: $1,242 per troy ounce, up from $1,146 at year-end
• 10-yr Treasury Yield: 2.31%, down from 2.45% at year-end
• 30yr fixed rate mortgage (average): 4.13%, down a bit from year-end
• Prime rate: 4.25%, up 0.5% since year-end (goes up each time the Fed raises rates)
• 6month CD rate (average): 0.42%. An increase from year-end but is still abysmally low

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