Commentary

Fisher Investments Editorial Staff
Commodities

OPECs’ Biggest Problem—in Two Charts

By, 07/21/2017
Ratings984.244898

OPEC’s efforts to rein in global oil production—and thereby quell the supply glut that has plagued Energy markets for three years—aren’t exactly bearing fruit.

While the cartel did manage to extend its previously agreed-to deal to reduce supply from members and a few select non-members (most notably, Russia), they are struggling to maintain a united front. This week, small-producing OPEC member Ecuador took the unusual step of publicly announcing they’d pump more than their allotted 522,000 barrels per day. And output increased from Libya and Nigeria, two OPEC members excused from the deal, which contributed to June OPEC production rising 1.4% to 32.61 million barrels per day—exceeding the group’s 32.5 million barrel ceiling. What’s more, compliance with the quotas fell to the lowest rate in six months, 78%. While these are no doubt challenges to the cartel’s ability to boost crude prices, there is a far bigger problem—one beyond their control: US shale. In our view, it all adds up to low oil prices sticking around longer than most think, a negative for Energy stocks.

Fast-growing US crude oil production was a key factor generating the glut in the first place, which is largely why OPEC’s initial strategy was to try to ramp up output in late 2014. They presumed lower prices would squash producers, fuel bankruptcies and bring some production offline. And for a time, they were right.

Commentary

Fisher Investments Editorial Staff
Politics, Reality Check

The State of Gridlock

By, 07/20/2017
Ratings1084.194445


Working at cross-purposes. (Photo by eelnosiva/iStock.)

Disclaimer: As always, our political commentary is intended to be nonpartisan. We favor no party nor any politician, and neither do markets. We assess developments solely for their potential market impact.

In the dog days of summer, the last thing anyone wants is more hot air, but that’s exactly what politicians are giving us. Thankfully, it has a silver lining, and yes we know we’re mixing metaphors: All the squabbling and posturing amounts to gridlock, which lowers legislative risk and makes stocks happy—even as people mostly hate it. The less gets done, the less markets have to worry about sweeping change creating winners and losers.

Commentary

Fisher Investments Editorial Staff

Don’t Sweat This Summer’s US Economic Data

By, 07/20/2017

It’s the dog days of summer, and if recent US headlines have you feeling in need of an ice-cold tonic, fret not! Your friendly MarketMinder staff has just the remedy: some cool bits of US data. As debates rage about the health of the US economy—particularly after some recent data were mixed—a high-level look suggests the drivers underpinning this expansion remain fine overall.  

June CPI numbers came out last week following Fed head Janet Yellen’s testimony to the Senate Banking Committee, which featured some inflation chatter: “There may be more going on. We’re watching inflation very carefully in light of low readings. … I think it’s premature to conclude that the underlying inflation trend is falling well short of 2%. I haven’t reached such a conclusion.” In recent weeks, Fed people have been mulling whether inflation’s slowdown is “transitory” or more likely to persist—if the latter, some have lobbied waiting on raising interest rates. It seems Ms. Yellen is in the “transitory” camp, though we caution against assuming Fed words mean action. Their decisions are “data-dependent,” which is code for “they are going to wait and see and interpret the data as they will.”

Mostly, we find it odd central bankers are tying themselves in knots over very stable prices, seeing as how price stability is supposedly one of their primary goals. For instance, while June CPI slowed to 1.6% y/y from May’s 1.9%, energy prices’ year-over-year gains petering out were partly to blame. Core inflation, which excludes food and energy, remains in the 1.7% - 2.3% bandwidth seen over the past several years. Prices of some core goods and services (e.g., vehicles and apparel in goods, airline fares, wireless phone services and motor vehicle repairs) have been weak lately, but it’s normal for various items in the CPI basket to diverge. Plus, we daresay consumers aren’t exactly screaming for the Fed to drive airfares higher. 

Commentary

Elisabeth Dellinger
Across the Atlantic, Forecasting

Wimbledon, Markets, Bad Analogies and You

By, 07/12/2017
Ratings1183.622881

 

Sam Querrey awaits a serve from Italy’s Thomas Fabbiano in their first-round match on Court 11, nine days before his shock quarterfinal win over Andy Murray. Photo by Elisabeth Dellinger.

Hello readers, today I’m going to be self-indulgent and treat you to a “What I Did on My Summer Vacation” essay, complete with two (probably bad) analogies to tie it to markets. When one is a tennis nut and finally gets to attend Wimbledon for the first time—and spends several hours queuing for it—one generally wants to find a way to write about it. So here, friends, is what this year’s tournament can teach you about investing.

Commentary

Fisher Investments Editorial Staff
Politics, Media Hype/Myths

Debt Ceiling Episode CXI: Return of the Revenge of the Son of the Debt Ceiling and the Temple of Doom Strikes Back, Part Deux

By, 07/12/2017
Ratings693.992754

Summer is here, which means it’s time for bad movie sequels and clichéd analogies likening various things to bad movie sequels. So you can count on your friendly MarketMinder editors—with tongue firmly in cheek—to bring you an article about the debt ceiling, everyone’s favorite bad sequel, which is back in the news thanks to Treasury Secretary Steve Mnuchin’s June testimony to Congress and lawmakers’ loose plans to vote on an increase before their summer recess. We’ve gone through this song and dance—err, sorry, seen this movie—many times before. First politicians play hardball, then administration-types warn about the risk of default, then the media has a conniption fit about default, and on they go until finally they kick the can. We’ve already had the first and second steps, but interestingly, the media commentary this time around has a different flavor: We’ve seen a raft of editorials arguing for the debt ceiling to go the way of the dodo. Seems like a good idea to us! The debt ceiling has always been symbolic. It doesn’t actually limit debt (which isn’t a problem anyway) in practice, and failure to raise it doesn’t do all the terrible things people fear it will. Might as well formally acknowledge it is an annoying heap of nothingness.

In the old days, Congress had to authorize every new debt increase. It worked for a while, but then a little thing called World War I happened, and Uncle Sam needed to mobilize. To speed the war effort, Congress allowed the Treasury to issue new debt at its discretion, without going to lawmakers for approval, as long as debt stayed below a certain amount. When debt reached whatever arbitrary limit they set, they’d simply raise it, and everyone would carry on as usual. The US did not borrow itself into oblivion, the Allies won the war, and all was good.

For a few decades, raising the debt ceiling was a boring procedural matter. But in the mid-20th century, politicians—ever the politickers—figured out voters weren’t big on debt, and that positioning themselves as anti-debt crusaders allowed them to use the debt “limit”[i] as a tool to win concessions. And thus began the time-honored tradition of holding the debt ceiling hostage to use as a bargaining chip in other fights. Both parties—and pretty much all factions within them—are guilty of this, and we suspect you aren’t invited to the “cool” parties on Capitol Hill until you can claim responsibility for setting off a debt ceiling fight. As a result, almost every time it comes around, we are all treated to a political circus. And when everyone is satisfied with whatever symbolic victory they can peddle to their constituents and lobbyist friends, they kick the can and go home.

Commentary

Christopher Wong
MarketMinder Minute, GDP, Reality Check

Market Insights: GDP Doesn’t Predict Stocks

By, 07/10/2017
Ratings433.883721

In this Market Insights video, we discuss the relationship between Gross Domestic Product (GDP) and stocks. Or, more specifically, the lack thereof.

Commentary

Fisher Investments Editorial Staff
Investor Sentiment, Reality Check

P/Es Are Above Average and That’s OK

By, 07/07/2017
Ratings844.333333

For years, folks have feared stocks are too expensive. Such worries seem ever-present, but they get renewed attention when various financial luminaries add their own warnings. Last week, for example, multiple Fed members commented on asset prices, using phrases like “somewhat rich,” “running very much on fumes” and “close monitoring is warranted.” Sounds worrying! But valuations alone don’t predict market direction. They are merely a sign of where sentiment is now: warming, but not close to euphoric.

The S&P 500 forward 12-month price-to-earnings ratio (which compares current stock prices to forecasted earnings) is above its post-2000 average—but only just! It stands at 17.6 today versus the post-2000 average of 15.4.[i] This is pretty unremarkable and not a sharp break from the recent past, either: the forward P/E first breached 17 on February 24, 2015 and has averaged 16.5 since.[ii] US stocks returned 21.3% over that time—gains that folks freaked out by “too high” valuations missed.[iii]

Exhibit 1: S&P 500 Valuations’ Mild Rise

Source: FactSet, as of 6/23/2017. S&P 500 12-Month Forward P/E Ratio, 12/31/1999 – 6/23/2017. 

Commentary

Ken Liu
GDP, Into Perspective

GDP Underestimates Economy’s Amazingness

By, 07/06/2017
Ratings714.28169


A lot of what goes on here isn’t counted in GDP. (Photo by alacatr/iStock.)

Which is right: high-flying stocks or ho-hum GDP? It’s one of this bull market’s defining questions, and GDP recently lost some ground in this intellectual horserace, thanks to the very statisticians who calculate it. That’s right, the BEA’s bean counters recently determined they’ve missed a few over the years, due to the increasing difficulty of calculating inflation. For stocks, the discovery doesn’t mean much—the findings are backward-looking, while markets discount the future. But it does provide more evidence that when markets and the economy (measured by government statistics) seem disconnected, markets are generally a more accurate—and timely—gauge.

Ever since Simon Kuznets spearheaded the effort to create national economic accounts in the 1930s[i]—basically creating GDP in the process—economists have been on a never-ending quest to perfect the measurement. From the start, Kuznets warned accounting for all productive activity is an impossible task—and the final measurement would inevitably be wrong.[ii] Determining what to count and where to classify it has only become trickier as technology improves and the digital economy mushrooms. As a recent book on the subject, Ryan Avent’s The Wealth of Humans, points out:

Commentary

Fisher Investments Editorial Staff
US Economy, Market Cycles

Happy Expansioniversary!

By, 07/05/2017
Ratings674.470149

As milestone birthdays go, eight usually doesn’t rate. Aside from rhyming with “great,” it seemingly isn’t so special a date. Yet as this economic expansion—which officially began in July 2009—turns eight, let’s all raise a glass and consider some timeless and timely takeaways.

Expansions and Bull Markets Aren’t Twins

When the recession officially ended on June 30, 2009, the bull market was already charging higher. It was born nearly three months earlier, on March 9. By the time the recovery officially began, the S&P 500 was up 36.9% from its low.[i] When the advance report of Q3 2009 GDP came out on October 29—providing the first official confirmation that growth had resumed in July—the S&P 500 had gained 59.8%.[ii]

Commentary

Fisher Investments Editorial Staff
Trade, Politics

Will a Possible Trump Steel Tariff Corrode Stocks?

By, 07/03/2017
Ratings644.351563

If you follow financial media lately, you might be under the impression you ought to be steeling yourself for some new protectionist measures from the Trump administration. Any day now Commerce Secretary Wilbur Ross is expected to announce findings from an investigation—permitted under Section 232 of the Trade Expansion Act of 1962—that could argue for tariffs on steel, allegedly based on national security concerns. This all plays right into longstanding fears that Trump is a trade disaster waiting to happen, triggering headlines claiming “Trump's plan to slap tariffs on steel imports carries big economic and political risks” and warning they “could set off global trade wars.” But despite the sensational rhetoric, steel tariffs are nothing new and, in our view, are unlikely to live up to pundits’ fears.

President Trump’s positions on trade have stoked these fears. On the campaign trail, Trump was a sharp critic of trade, in particular the North American Free Trade Agreement (NAFTA) and China. He frequently said on the stump he would use executive branch powers to “protect” American jobs and specifically that he believes steel imports are “killing our steelworkers and our steel companies.” (Hence, why we say Commerce’s investigation is allegedly based on national security concerns.) Trump’s protectionist rhetoric is a major reason why Wall Street feared him winning, and why some economists and pundits argue his policies are bad for the economy.

But regardless of those fears, what the Trump administration is proposing is nothing new. Basically every administration since President Lyndon Johnson has enacted some variety of steel tariff, even if the justification slightly differs now.

Commentary

Christopher Wong
MarketMinder Minute, GDP, Reality Check

Market Insights: GDP Doesn’t Predict Stocks

By, 07/10/2017
Ratings433.883721

In this Market Insights video, we discuss the relationship between Gross Domestic Product (GDP) and stocks. Or, more specifically, the lack thereof.

Commentary

Fisher Investments Editorial Staff
Investor Sentiment, Reality Check

P/Es Are Above Average and That’s OK

By, 07/07/2017
Ratings844.333333

For years, folks have feared stocks are too expensive. Such worries seem ever-present, but they get renewed attention when various financial luminaries add their own warnings. Last week, for example, multiple Fed members commented on asset prices, using phrases like “somewhat rich,” “running very much on fumes” and “close monitoring is warranted.” Sounds worrying! But valuations alone don’t predict market direction. They are merely a sign of where sentiment is now: warming, but not close to euphoric.

The S&P 500 forward 12-month price-to-earnings ratio (which compares current stock prices to forecasted earnings) is above its post-2000 average—but only just! It stands at 17.6 today versus the post-2000 average of 15.4.[i] This is pretty unremarkable and not a sharp break from the recent past, either: the forward P/E first breached 17 on February 24, 2015 and has averaged 16.5 since.[ii] US stocks returned 21.3% over that time—gains that folks freaked out by “too high” valuations missed.[iii]

Exhibit 1: S&P 500 Valuations’ Mild Rise

Source: FactSet, as of 6/23/2017. S&P 500 12-Month Forward P/E Ratio, 12/31/1999 – 6/23/2017. 

Commentary

Ken Liu
GDP, Into Perspective

GDP Underestimates Economy’s Amazingness

By, 07/06/2017
Ratings714.28169


A lot of what goes on here isn’t counted in GDP. (Photo by alacatr/iStock.)

Which is right: high-flying stocks or ho-hum GDP? It’s one of this bull market’s defining questions, and GDP recently lost some ground in this intellectual horserace, thanks to the very statisticians who calculate it. That’s right, the BEA’s bean counters recently determined they’ve missed a few over the years, due to the increasing difficulty of calculating inflation. For stocks, the discovery doesn’t mean much—the findings are backward-looking, while markets discount the future. But it does provide more evidence that when markets and the economy (measured by government statistics) seem disconnected, markets are generally a more accurate—and timely—gauge.

Ever since Simon Kuznets spearheaded the effort to create national economic accounts in the 1930s[i]—basically creating GDP in the process—economists have been on a never-ending quest to perfect the measurement. From the start, Kuznets warned accounting for all productive activity is an impossible task—and the final measurement would inevitably be wrong.[ii] Determining what to count and where to classify it has only become trickier as technology improves and the digital economy mushrooms. As a recent book on the subject, Ryan Avent’s The Wealth of Humans, points out:

Commentary

Fisher Investments Editorial Staff
US Economy, Market Cycles

Happy Expansioniversary!

By, 07/05/2017
Ratings674.470149

As milestone birthdays go, eight usually doesn’t rate. Aside from rhyming with “great,” it seemingly isn’t so special a date. Yet as this economic expansion—which officially began in July 2009—turns eight, let’s all raise a glass and consider some timeless and timely takeaways.

Expansions and Bull Markets Aren’t Twins

When the recession officially ended on June 30, 2009, the bull market was already charging higher. It was born nearly three months earlier, on March 9. By the time the recovery officially began, the S&P 500 was up 36.9% from its low.[i] When the advance report of Q3 2009 GDP came out on October 29—providing the first official confirmation that growth had resumed in July—the S&P 500 had gained 59.8%.[ii]

Commentary

Fisher Investments Editorial Staff
Trade, Politics

Will a Possible Trump Steel Tariff Corrode Stocks?

By, 07/03/2017
Ratings644.351563

If you follow financial media lately, you might be under the impression you ought to be steeling yourself for some new protectionist measures from the Trump administration. Any day now Commerce Secretary Wilbur Ross is expected to announce findings from an investigation—permitted under Section 232 of the Trade Expansion Act of 1962—that could argue for tariffs on steel, allegedly based on national security concerns. This all plays right into longstanding fears that Trump is a trade disaster waiting to happen, triggering headlines claiming “Trump's plan to slap tariffs on steel imports carries big economic and political risks” and warning they “could set off global trade wars.” But despite the sensational rhetoric, steel tariffs are nothing new and, in our view, are unlikely to live up to pundits’ fears.

President Trump’s positions on trade have stoked these fears. On the campaign trail, Trump was a sharp critic of trade, in particular the North American Free Trade Agreement (NAFTA) and China. He frequently said on the stump he would use executive branch powers to “protect” American jobs and specifically that he believes steel imports are “killing our steelworkers and our steel companies.” (Hence, why we say Commerce’s investigation is allegedly based on national security concerns.) Trump’s protectionist rhetoric is a major reason why Wall Street feared him winning, and why some economists and pundits argue his policies are bad for the economy.

But regardless of those fears, what the Trump administration is proposing is nothing new. Basically every administration since President Lyndon Johnson has enacted some variety of steel tariff, even if the justification slightly differs now.

Commentary

Fisher Investments Editorial Staff
Commodities

Oil Drum Doldrums

By, 06/29/2017
Ratings923.86413

Last year, Energy was the MSCI World’s best-performing sector and ended 2016 on a relative upswing as investors cheered OPEC-led oil production cuts attempting to alleviate a supply glut. There was just one small thing folks didn’t anticipate: surging US shale oil production, which has offset OPEC’s weak efforts. By June 21, crude was down over -20% from a February high, and Energy stocks are down -10.1% year to date—the world’s worst sector.[i] Last year’s outperformance? Largely gone. Energy is now lagging cumulatively over the last year and a half—and is only ahead by a fraction of a percentage point since January 20, 2016—oil’s low.[ii] With hindsight, it’s clear 2016’s Energy outperformance was a countertrend rally in a longer-term slide. Although sentiment is catching up with reality, with a fundamental supply overhang unlikely to dwindle anytime soon, we think it’s still too early to load up on Energy stocks.

Oil’s latest downturn is an extension of a much larger slide that began mid-2014. (Exhibit 1) But our story begins long before then, in the 2000s, when sky-high oil prices incentivized US producers to invest in the technology[iii] they’d need to tap America’s vast shale oil reserves. Shale oil was expensive and difficult to access, but nosebleed oil prices made it worth the cost. It took a few years, but by 2012, the efforts were bearing fruit, and US oil production was soaring. For a while, oil bounced in a high range, as demand was also growing at a fast clip. But as China’s infrastructure buildouts slowed and Emerging Market growth rates cooled, so did energy demand growth. Meanwhile, supply kept soaring. By 2014, supply growth far exceeded demand growth, sending prices plunging to just $26 a barrel in January 2016.

Exhibit 1: Oil’s Wild Ride

Research Analysis

Fisher Investments Editorial Staff
Into Perspective

Market Insights Podcast: Adviser’s Corner - April 2017

By, 04/28/2017
Ratings393.871795

In this podcast, Fisher Investments' US Private Client Services Vice President K.C. Ellis discusses our clients’ common questions from around the country, including retirement planning, homegrown dividends and dollar cost averaging.

Research Analysis

Fisher Investments Editorial Staff
Into Perspective

Market Insights Podcast: 2017 Market Outlook

By, 03/13/2017
Ratings203.925

In this podcast, Fisher Investments’ Investment Policy Committee discusses their views on capital markets and the economy in 2017.

Research Analysis

Fisher Investments Editorial Staff
Reality Check

Market Insights Podcast: Talking Trump and Trade

By, 02/15/2017
Ratings373.27027

In this podcast, we interview Content Analyst Elisabeth Dellinger on recent talk of protectionism, border taxes and trade.

Research Analysis

Scott Botterman
Into Perspective

2017: The Year of Falling European Political Uncertainty

By, 01/31/2017
Ratings734.171233

Falling uncertainty gave stocks a tailwind in 2016 as investors moved past the Brexit referendum and US presidential election. By year end, persistent skepticism gave way to budding optimism, and the proverbial “animal spirits” stirred. This year, it should be continental Europe’s turn. France, Germany and the Netherlands all hold national elections, while Italy is expected to call snap elections as well. Many fear populist, non-traditional, anti-EU parties on both the far right and left are on the rise and will grab national power. Though these parties are gaining in polls and winning local elections, they still lack the political infrastructure to meaningfully impact policy or make the market’s most-feared scenarios—like another country’s exit from the EU or even the eurozone—a reality. Thus, when the “worst-case” scenario doesn’t come to pass, the likely result is relief.

European politics are factionalized and scattered. In the US, the two-party system dominates, with minor third party movements cropping up occasionally. But in the parliamentary system—used often in Europe and elsewhere around the globe—there is room for more parties and more platforms. Lately, parties with minority support have popped up across Europe, forcing fragile coalitions and muddying the legislature’s ability to take decisive policy action. This feature alone screams more gridlock than widely imagined, reducing legislative risks for stocks.

Italy

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What We're Reading

By , CNNMoney, 07/24/2017

MarketMinder's View: Ever since equity markets’ rally in the wake of Donald Trump’s election, many in the media called it a “Trump Rally,” driven by hope of “market friendly” policy like tax cuts—and that stocks would be doomed if Trump didn’t follow through. Well, it’s halfway into the Trump presidency and a GOP-held Congress, and little meaningful legislation has passed—yet stocks have still risen higher. In our view, this is all compelling evidence the “Trump Rally” was always a false narrative: More bull market never depended on promises of fiscal stimulus or tax cuts. This piece concedes some of those points, though it still suggests potential presidential action could affect the broader market one way or another. Folks, we expect the bull to charge higher for the rest of the year for a number of reasons: underappreciated global economic growth (particularly in Europe), gridlocked politics (as it is in the US) and increasingly optimistic investor sentiment. These are all reasons to be bullish—not the overrated impact of tax policy. 

By , US News & World Report, 07/24/2017

MarketMinder's View: We found this piece mixed overall. First, some of the positives: We agree basing investment strategies on industry-accepted “rules of thumb” is a flawed approach. The “60-40 rule,” in which a long-term investor should own about 60% stocks and 40% fixed income until age 60—and then flip that ratio after age 60—is easy to remember, but that doesn’t make it a sound plan. In our view, it is critical to first determine what your personal investment objectives are, and then determine the appropriate asset allocation that will put you in the best position to reach those goals. This will vary among individuals, but many investors tend to underestimate their appropriate stock exposure. This is why we found several of the titular “5 reasons to stay in the stock market”—like the current interest rate environment—a bit confusing. Folks, at the risk of oversimplifying things, if you require long-term growth, you will most likely need to own stocks. Hard stop. No other similarly liquid asset class offers the same growth potential. For more, see the retirement section of our Market Insights blog.    

By , Bloomberg , 07/24/2017

MarketMinder's View: This piece does a good job explaining the limitations of investing in commodities, particularly for those with a long time horizon: “They provide no dividends or income. They don’t have earnings. Commodities are more of an input than a financial asset. In many ways, a bet for commodities is a bet against technology and innovation.” Also: “Commodities have shown lower returns than cash equivalents with higher volatility than stocks.” As the table here points out, the S&P 500 has annualized 9.93% since 1991 compared to the Bloomberg Commodities Index’s 2.18% and One Month Treasury Bills’ 2.61%. As always, past performance isn’t indicative of future returns, but commodities are prone to big boom and bust cycles, and getting the timing right is critical for success. Unless you have information few others have, trying to time inflection points in commodity cycles is a futile exercise, in our view.

By , New York Times, 07/24/2017

MarketMinder's View: The thesis here rests on an attempt to quantify the unquantifiable—partisan conflict—and we have some issues with its construction (namely, we aren’t convinced it adjusts for article syndication). More broadly, though, allow us to dispel the mystery befuddling those wondering why stocks keep rising despite today’s highly partisan and contentious political environment: Markets are politically agnostic. They do not favor one political party or ideology over another. What markets care about more: What is the likelihood the government radically changes the rules, which could introduce uncertainty and create new winners and losers? Under gridlocked environments—like what we have in the US and other developed, competitive economies now—legislatures can do very little. Stocks like this, which few appreciate. Now as avid news consumers, we aren’t saying partisan rancor is healthy or pleasant—frankly, we find it all to be sometimes exhausting—but from stocks’ perspective, partisanship and even “nastiness” in the public discourse isn’t reason to be bearish.

Global Market Update

Market Wrap-Up, Friday, July 21, 2017

Below is a market summary as of market close Friday, July 21, 2017:

  • Global Equities: MSCI World (-0.2%)
  • US Equities: S&P 500 (-0.0%)
  • UK Equities: MSCI UK (-0.4%)
  • Best Country: Singapore (+1.0%)
  • Worst Country: Germany (-1.4%)
  • Best Sector: Utilities (+0.5%)
  • Worst Sector: Energy (-0.9%)

Bond Yields: 10-year US Treasury yields fell 0.03 percentage point to 2.23%.

 

Editors' Note: Tracking Stock and Bond Indexes

 

Source: FactSet. Unless otherwise specified, all country returns are based on the MSCI index in US dollars for the country or region and include net dividends. S&P 500 returns are presented including gross dividends. Sector returns are the MSCI World constituent sectors in USD including net dividends.