Macro Market Movers

In other British union news—though it may not be getting quite as much media coverage—Brexit negotiations are ongoing as Britain works to separate itself from the EU.

Prince Harry and Meghan Markle will wed on Saturday. Around 600 guests are expected to attend, a small crowd in comparison to the Duke and Duchess of Cambridge (William & Kate) who wed in front of 1,900 guests.

Treasuries have been under pressure in recent months, with the 10-year yield hitting 3% for the first time since late 2013 due to a combination of factors including expectations of higher economic growth and inflation.

How much do interest rates matter for EM equity investors? Over short-term periods, like what we are experiencing now, rising interest rates tend to cause higher volatility for emerging market (EM) stocks.

As our LPL Chart of the Day shows, European economic data reached a noteworthy low on May 7, after Citi’s Economic Surprise Index for the Eurozone dipped beneath -100 for the first time since 2011.

Economic growth forecasts tracking above 3%. With half of the second quarter now in the rearview, consensus forecasts are tracking to 3.1% gross domestic product growth for this quarter.

Oil has been on the rise since last June, when prices hit an interim low of about $42.50 before crossing $70 for the first time since 2014 on May 8.

The impact of a 3% 10-year yield. The 10-year Treasury yield continues to hover near 3%, but we feel this level is more important psychologically than it is for the bottom line of investors or borrowers.

Widespread gains helped drive the S&P 500 Index back into positive territory on the year, though interest-rate sensitive sectors like utilities and telecommunications lagged the broad market.

The S&P 500 Index closed at its highest level since March 16 yesterday and is now up 1.85% for the year. But, what’s the significance?