Looking back at the second quarter, market sentiment was positive until May 22. On that date, U.S. Federal Reserve Chairman Ben Bernanke testified before Congress. His remarks led to speculation that the Fed would begin to scale back its economic stimulus efforts. In response, market sentiment shifted. A series of volatile trading sessions followed as stocks, bonds and commodities all lost value.
We expect markets to stay on a choppy course in the months immediately ahead. All eyes will be on the Fed’s economic stimulus efforts, as any change will be felt across global financial markets. Outside the U.S., economic growth concerns abound in Europe, Japan, China, Brazil, India and other countries. Despite the second-quarter dip, we expect the global economy to continue on the long, slow road to recovery.