Stock Market Commentary -

Global markets continued to rally throughout the second quarter of 2017. International stocks in both developed and developing markets saw healthy gains of 6.3%, as measured by both the MSCI EAFE and MSCI Emerging Markets indices. Drivers of strong international performance included strengthening economic fundamentals worldwide, improvement in corporate earnings for European companies aided by accommodative monetary policies and growth in exports for Japan. A weaker US dollar also contributed to the gains.

In the face of a rate hike by the Federal Reserve, the S&P 500 delivered a respectable quarterly total return of 3.1%, which has climbed to 9.3% year-todate. The strongest performing sector during the quarter was Healthcare, up 7.1%, as valuations and delay in the passage of the healthcare bill drew investors back into these stocks. Industrials rose 4.7% and Financials, up 4.2%, eked just ahead of Technology (+4.1%) in the final week of the quarter when banks passed their stress tests. The poorest performance during the quarter came from Telecom, which fell 7%, as rising competiton is knocking down pricing for telecom services. The Energy sector lost 6.4% on falling oil prices as global over-supply remained a concern.