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Global Investing

Global stocks posted modest gains amid healthy corporate earnings reports and an improving outlook for global economic growth. U.S. stocks hit a series of new record highs and European equities enjoyed significant inflows. A weakening dollar and rising commodities prices supported a strong rally in emerging markets.

Telecommunication services and basic materials stocks led markets higher, supported by signs of a broad-based recovery in the global economy. Information technology stocks also rallied on solid earnings growth from tech giants Apple, Facebook and Microsoft. Health care and consumer staples stocks lagged the overall market.

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MARKET COMMENTARY  |  July 2017

World Markets Review for Second Quarter 2017

Global stocks advanced amid accelerating economic growth in the U.S. and Europe, coupled with signs of diminishing political risk in the euro zone. Investor sentiment improved markedly as political newcomer Emmanuel Macron defeated Marine Le Pen in the French presidential election, largely erasing concerns that France may attempt to leave the European Union.

Health care stocks experienced strong returns as the U.S. Senate proposed a new industry-friendly plan to reform the nation’s health care system. Emerging markets also rallied amid improving global economic data and a weaker dollar. Energy stocks declined sharply, hurt by persistent oversupply concerns that continued to drive oil prices lower. 

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INVESTMENT INSIGHTS  |  July 2017

2017 Midyear Outlook

For the first time in years, the world’s major economies all appear to be on the road to recovery. This shift is creating opportunities for investors to rebalance their portfolios to take advantage of new opportunities overseas as well as in the bond market.

Download our 2017 Midyear Outlook for an in-depth look at how economic momentum is building across the globe amid political uncertainty. Our research pinpoints unique opportunities in non-U.S. markets as the macroeconomic backdrop is positive for global growth. There are also ways to position fixed income portfolios as interest rates are likely to remain lower for longer in the U.S.

Highlighted below are some of the key insights from our Midyear Outlook. 

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MARKET COMMENTARY  |  June 2017

World Markets Review for May 2017

Global stocks rose amid signs of improving economic growth and healthy corporate earnings. Several key indexes hit record highs as pro-European Union candidate Emmanuel Macron won the French presidential election. However, persistent questions about political stability in the U.S., Europe and elsewhere tempered those gains.

Information technology stocks led markets higher, supported by surging share prices for U.S. tech giants Apple and Google parent, Alphabet. The utilities sector rallied amid rising demand for dividend-paying stocks. Emerging markets stocks also advanced, despite a brewing political scandal that sent Brazilian markets tumbling. 

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MARKET COMMENTARY  |  May 2017

World Markets Review for April 2017

Global stocks rose modestly, supported by improving world economic growth and diminishing political risk. Investors cheered better economic data in the U.S., while breathing a sigh of relief over the results of the first round of France’s presidential election. French stocks rallied on poll results showing that a centrist, pro-European candidate is likely to win the May 7 runoff election.

Cyclical stocks generally outpaced defensive areas of the market, led by gains in the industrials and consumer discretionary sectors. Information technology stocks also moved higher amid strong earnings reports from bellwether tech companies. Energy stocks declined, following oil prices lower for the month.

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MARKET COMMENTARY  |  April 2017

World Markets Review for First Quarter 2017

Global stocks rallied amid strong corporate earnings growth and improving economic data in the United States, Europe and Japan. Several key market indexes hit a series of new highs, fueled by expectations that newly elected U.S. President Donald Trump would deliver business-friendly policies, including tax cuts and regulatory reductions.

Economically sensitive stocks led markets higher, highlighted by a 12% gain in the information technology sector. Health care stocks rose sharply as U.S. lawmakers failed to repeal the Affordable Care Act, reducing uncertainty surrounding the legislative overhaul. Emerging markets stocks also rallied on brighter prospects for China’s economy.

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MARKET COMMENTARY  |  February 2017

World Markets Review for January 2017

Global stocks rose modestly, supported by strong corporate earnings and signs of improving economic growth in the U.S., Europe and Japan. Gains were tempered by political uncertainty around the world, including investor worries about upcoming elections in Germany and France. Emerging markets enjoyed the best returns, boosted in part by higher prices for raw materials.

Economically sensitive sectors generally outpaced defensive stocks, underscored by significant gains in the information technology and materials sectors. Consumer discretionary stocks also advanced amid healthy growth in inflation and consumer spending. Energy stocks declined as oil prices slipped on reports of a substantial rise in U.S. crude oil inventories. 

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MARKET COMMENTARY  |  January 2017

World Markets Review for 2016

In a year marked by volatility and political upheaval, global stocks rallied on signs of improving U.S. economic growth and aggressive central bank stimulus measures around the world. U.S. stocks led developed markets higher, particularly late in the year as investors cheered Donald Trump’s unexpected victory over Hillary Clinton in the U.S. presidential election. Emerging markets also enjoyed strong returns, supported by rising commodity prices and political reform efforts.

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MARKET COMMENTARY  |  January 2017

World Markets Review for Fourth Quarter 2016

Global stocks ended the year on a high note, boosted by investor enthusiasm for U.S. political change and expectations for an improving world economy. U.S. stocks drove markets higher even as a strong dollar threatened to weigh on corporate earnings. Financial stocks soared as the Federal Reserve raised interest rates for just the second time in a decade. High-grade bonds declined and the dollar rallied against the euro, the yen and most other currencies.

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MARKET COMMENTARY  |  December 2016

World Markets Review for November 2016

Global stocks rose amid market optimism for Donald Trump’s ascendancy to the U.S. presidency and signs of accelerating U.S. economic growth. Several key indexes hit record highs on expectations of market-friendly policies under the new administration. Financial stocks rallied as global interest rates moved higher. Bonds fell sharply and the dollar advanced against the euro, the yen and most other currencies.

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INVESTMENT INSIGHTS  |  October 2016

The Long View: The Changing Face of the Global Consumer

Consumer spending, long a driver of the global economy, is undergoing sweeping change. Whether it’s housing for millennials or health care for baby boomers, a significant shift in the way people spend money is underway in both advanced economies and the developing world.

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MARKET COMMENTARY  |  October 2016

World Markets Review for October 2016

Global stocks declined modestly as signs of improvement in the U.S. economy raised investor concerns about higher interest rates. Health care stocks fell sharply amid ongoing drug pricing pressures and disappointing earnings reports, while the financial sector rallied on the outlook for rising rates. High-grade bonds lost ground and the U.S. dollar advanced against the euro, the yen and most other currencies.

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MARKET COMMENTARY  |  September 2016

World Markets Review for Third Quarter 2016

Stocks rebounded amid signs of stabilization in the global economy, strong earnings at bellwether companies and ongoing central bank stimulus measures. A “risk on” rally characterized the July-to-September period, following a highly volatile second quarter. Technology and materials stocks led markets higher, while the utilities and telecommunication services sectors declined. High-grade bonds advanced and the U.S. dollar fell against the euro and the yen.

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MARKET COMMENTARY  |  August 2016

World Markets Review for August 2016

Stocks finished the month essentially flat as signs of an improving global economy were offset by investor concerns about higher U.S. interest rates. Information technology and financial stocks enjoyed the biggest gains while the utilities and health care sectors lost ground. High-quality bonds also declined as the Federal Reserve hinted at a rate hike this year. The dollar rose modestly against the euro, the yen and most other currencies.

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MARKET COMMENTARY  |  August 2016

World Markets Review for July 2016

Global stocks rebounded from post-Brexit blues, regaining most of the losses suffered after British voters approved a referendum in June to leave the European Union. Central bank commitments to continue with easy monetary policy and economic stimulus measures helped to support stock prices. Emerging markets stocks rallied. Investment-grade bonds rose modestly. And the dollar was essentially flat against other major currencies.

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INVESTMENT INSIGHTS  |  July 2016

Are the American Funds Exposed to Brexit?

International Funds Have the Highest Concentration of Investments in European Companies.

The U.K.’s June 23 vote to leave the European Union surprised many investors, triggering one of the steepest two-day selloffs for global equities in history. While markets have since recovered much of those losses, volatility will likely persist as the short- and long-term impact of Brexit on the U.K. and the rest of Europe remains unclear. The uncertainty has driven government bond yields to record lows and the U.S. dollar to a three-decade high against the British pound.

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INVESTMENT INSIGHTS  | 
July 2016
 |  FEATURING Matt Miller , Mark A. Brett & Jens Søndergaard

Brexit’s Fallout: Could a Shock to the System Be a Good Thing?

Capital Group portfolio manager Mark Brett and economist Jens Søndergaard, both based in London, discuss possible implications of the Brexit vote for the U.K., the European Union and investors.

Watch Video (4:57)

No doubt, the world’s markets spent the first half of 2016 on rocky ground. Investors have been confronted with the British vote to leave the European Union (“Brexit”), a “growth scare” in the U.S., the economic deceleration in China, and the introduction of negative interest rates in some markets. Nevertheless, the global economy is expected to remain on a path to growth — albeit very slow growth.

Looking ahead to the second half of 2016, market volatility is likely to remain elevated. What are the longer term implications of the Brexit vote? Can the resilient U.S. economy continue on its growth path? Will Chinese consumption remain healthy as the world’s second-largest economy continues to slow? Potential opportunity will likely arise for disciplined investors who can look past the near-term macroeconomic clouds toward individual companies with bright prospects.

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INVESTMENT INSIGHTS  |  July 2016

Three Reasons Why the U.K. Should Be O.K.

It’s not worth dwelling too much on the reasons why British voters opted to leave the European Union. That question will be analyzed by political pundits and the media for years to come. For investors, a key question today is, will the U.K. be OK going forward?

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MARKET COMMENTARY  |  July 2016

World Markets Review for Second Quarter 2016

Global stocks rose modestly in a volatile quarter marked by heightened concerns about threats to worldwide economic growth. Stocks initially dropped sharply after British voters on June 23 approved a ballot measure to leave the European Union, but a strong bounce-back rally erased most of the losses. Rising oil prices fueled gains in the energy sector while consumer discretionary stocks declined. High-grade bonds, the U.S. dollar and gold rallied.

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INVESTMENT INSIGHTS  |  June 2016  |  FEATURING Robert H. Neithart

Uncovering Value in Emerging Markets Bonds Amid Political Change and Uneven Growth

Emerging markets bonds have notched big gains in 2016, despite political turmoil and economic setbacks. Though it is difficult to definitively say that the market has turned for the better, portfolio manager Rob Neithart says there are good reasons for investors to feel positive. The yield advantage of emerging markets over developed markets is hard to ignore, and in some cases valuations are as attractive as they’ve been in years.

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But Process Will Be Lengthy and Outcome Likely Not as Bad as Markets Fear

  • Stock markets slide in response to Brexit vote in an orderly decline
  • British pound suffers big loss, euro also slides against dollar
  • Market volatility to remain elevated as Britain and Europe reach new agreements
  • A long-term investment horizon remains key to successful investing

British voters surprised the world on Thursday by approving a proposal to abandon the European Union, with 51.9% of the vote in favor of leaving and 48.1% in favor of remaining. Global markets and currencies reacted negatively to the news, evidenced by a spike in volatility and declines across all major equity markets. Stocks gave up ground after rallying the prior week in the run-up to the vote.

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INVESTMENT INSIGHTS  |  June 2016

Brexit: How Did We Get Here?

Great Britain joined the European Union’s predecessor, the European Economic Community, in 1973 and it has always been a somewhat reluctant member. The EU now includes 28 nations, 19 of which are part of the single-currency monetary union known as the euro zone.

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INVESTMENT INSIGHTS  |  June 2016

European Union Faces Crucial Test in Brexit Referendum

U.K. voters will go to the polls on Thursday, June 23 to decide whether they should stay in the European Union or abandon the 28-nation bloc. The so-called Brexit vote is a significant challenge to the EU’s authority and threatens to further destabilize Europe at a time when weak economic growth and high debt levels are already straining intergovernmental relations.

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INVESTMENT INSIGHTS  |  June 2016  |  FEATURING Fergus N. MacDonald & David A. Hoag

Sub-Zero World: Not Much Positive About Negative Rates

  • Central banks are experimenting with negative interest rates in an attempt to jumpstart weak economies. 
  • Negative-yielding debt in Europe and Japan makes U.S. bonds attractive on a relative basis. 
  • Portfolio managers David Hoag and Fergus MacDonald warn that negative rates may be causing distortions in asset prices and the economy.
  • Quantitative easing and negative rates are bound to spark inflationary pressures over time. 
  • The U.S. Federal Reserve is unlikely to introduce negative rates.

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MARKET COMMENTARY  |  June 2016

World Markets Review for May 2016

Stocks rose modestly as signs of improving global economic growth were tempered by investor concerns about a potential increase in U.S. interest rates. Developed markets generally outpaced emerging markets amid encouraging economic data in the U.S., Europe and Japan. Technology stocks rallied, while the energy and materials sectors lost ground. Bonds were essentially flat and the U.S. dollar rose against the euro, the yen and most other currencies.

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MARKET COMMENTARY  |  May 2016

World Markets Review for April 2016

Global stocks posted modest gains, supported by rising oil prices and aggressive monetary stimulus measures. Energy and materials stocks rallied as signs of improving demand from China sent commodity prices sharply higher. Information technology stocks declined on disappointing first-quarter earnings at some bellwether companies. Bonds advanced and the U.S. dollar declined against the euro, the yen and most other currencies.

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INVESTMENT INSIGHTS  |  April 2016  |  FEATURING Michael T. Kerr

The Long View: Investing in U.S. Innovation

The United States’ economy is in the midst of an extraordinary transformation, one that has the power to redefine America’s future. Across the country, the nation’s resilience in the face of adversity and its entrepreneurial spirit are providing unprecedented opportunities for companies and investors.

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Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses or the collective investment trust's Characteristics statement, which can be obtained from a financial professional, Capital or your relationship manager, and should be read carefully before investing. 

The return of principal for bond funds and for funds with significant underlying bond holdings is not guaranteed. Fund shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. Lower rated bonds are subject to greater fluctuations in value and risk of loss of income and principal than higher rated bonds. Bond ratings, which typically range from AAA/Aaa (highest) to D (lowest), are assigned by credit rating agencies such as Standard & Poor's, Moody's and/or Fitch, as an indication of an issuer's creditworthiness. If agency ratings differ, the security will be considered to have received the  of those ratings, consistent with the fund's investment policies. Securities in the Unrated category have not been rated by a rating agency; however, the investment adviser performs its own credit analysis and assigns comparable ratings that are used for compliance with fund investment policies. 

Bond ratings, which typically range from AAA/Aaa (highest) to D (lowest), are assigned by credit rating agencies such as Standard & Poor's, Moody's and/or Fitch, as an indication of an issuer's creditworthiness.

Investing outside the United States involves risks, such as currency fluctuations, periods of illiquidity and price volatility, as more fully described in the prospectus. These risks may be heightened in connection with investments in developing countries. 

Certain market indexes are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index. 

The Capital Group companies manage equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.

Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and not to be comprehensive or to provide advice. 

Past results are not predictive of results in future periods.