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Markets in perspective – March 2016 in review

May 6, 2016

The following is the Russell Investments Chief Investment Officers’ views of the key themes affecting market performance in March 2016. All data is as of March 31, 2016. Sources and indexes used to represent asset classes can be found in the disclosures at the end of this post.

ECONOMIC FACTORS

1.  Fed slows pace of tightening

Concerns about market volatility, global growth and inflation expectations led the Federal Reserve (Fed) to adopt a more cautious approach to hiking rates. While hawkish members have voiced disagreement, Fed leadership appears content to now raise rates twice in 2016 – a view that is consistent with our own Global Market Outlook – Q2 Update Report.

2.  Recession fears drop as U.S. economic data strengthens

The U.S. economy proved resilient again at the start of 2016. The labor market added over 200,000 jobs per month in the face of significant uncertainty. The manufacturing sector showed signs of bottoming out. The U.S. economy continued chugging along, and that was good enough to drive a rebound in investor sentiment for March.

3.  U.S. dollar weakens

The U.S. dollar depreciated 4% over the first quarter of the year. We view this behavior as consistent with the dollar peaking as expensive valuations and a slower pace of Fed rate hikes (from four to two) limited further upside.

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Second Annual Blue Vault Broker Dealer Educational Summit 2016
Broker Dealer Educational Summit 2016
April 14, 2016

The Blue Vault Summit could not have been more perfectly timed. This gathering of the Broker Dealer and Sponsor communities provided insightful and open discussion from several vantage points. These conversations are paramount, especially in a time of significant regulatory change.