Pension Funds Pile on Risk Just to Get a Reasonable Return
June 1, 2016
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The Dow industrials and S&P 500 fell Tuesday, with major indexes still on track to end the month higher despite mounting expectations for a U.S. interest rate increase.
The Dow Jones Industrial Average fell 88 points, or 0.5%, to 17785. The S&P 500 lost 0.2% and the Nasdaq Composite Index rose 0.1%.
That left the Dow industrials on pace to finish the month less than 0.1% higher, while the S&P 500 was headed toward a 1.4% May gain and the Nasdaq Composite poised for a 3.4% monthly increase.
Some analysts said even May’s mixed gains were an encouraging sign for equities markets, given new concerns about increased interest rates and other global uncertainty.
Expectations for the Fed to announce an interest-rate increase this summer have risen dramatically since the start of the month, while the dollar has gained for four consecutive weeks.
“It’s encouraging, given what investors have had thrown at them,” said Mark Peden, investment manager at Kames Capital.
”Investors are taking the view that the economic cycle is beginning to normalize, and growth is perhaps not as horribly scarce out there as people thought,” he said.
Some traders said Tuesday’s moves marked a pause for investors ahead of the Fed’s June meeting and the vote over the U.K.’s membership in the European Union.
June 2016 (2)