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It seems like investors never stop talking about the Fed. Now, with another Fed meeting scheduled December 13-14, analysis of the possible implications of an expected December rate hike is reverberating across the media.
In the wake of the U.S. election, stocks generally reacted positively, with the Dow Jones Industrial Average hitting an intraday high in the week after the vote. Some sectors, including health care, financials, and energy have rallied. But the short-term market reaction has been uneven. Bonds have seen significant price losses, and interest-rate sensitive sectors—including utilities and telecom—have suffered.
After a sluggish 2015, the industrials and materials sectors have bounced back this year on the strength of recovering commodity prices. The outlook remains strong, says Tobias Welo, manager of Fidelity® Select Industrials (FCYIX), in part because of the likelihood of increased funding for defense and infrastructure projects.
Despite several significant hiccups, stocks are in the green in 2016. The S&P 500 has gained 5% year to date and the MSCI World Index has added nearly 2%, as of October 24, 2016. Several significant data points, including U.S. labor, manufacturing, and housing markets, are showing signs of a global economy that is growing, albeit slowly.
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