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Market Commentary

November 2016 Market Commentary – Value Trumps Growth

Highlights:

• Despite an initial sharp overnight sell-off, global equity markets soared following the election of Donald Trump as the next president of the United States. 
• U.S. small caps and value were the clear winning styles emerging from Trump’s victory as U.S. small caps rose 12.5% versus 3.7% for the S&P.   S&P Pure Value returned 8.6% versus 1.3% for Pure Growth.
• Global bond markets sold off as investors absorbed the implications of a what a Trump presidency might have on forward inflation expectations.  The 10-year U.S. Treasury yield rose to 2.38% from 1.83% at the beginning of the month. 
• Overseas bond yields also rose following the election as the reflation trade takes hold.  The 10-year German and Japanese government yields rose to 0.275% and 0.025%, respectively. 
• The U.S. dollar (DXY) strengthened 3.9% while emerging markets suffered in response to the perceived protectionist policies that would prevail under a Trump administration.  MSCI Emerging Markets dropped 4.6%. 

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