April snapshot

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May 11, 2021

BNY Mellon is committed to delivering cost-effective, quality solutions to help investors achieve their financial goals. Whether you’re new to investing or you’re a seasoned investor, exchange-traded funds (ETFs) can be a simple, cost-effective approach for broad market participation. Here we consider some of the major trends making headlines today.

1Morningstar: S&P 500. Accessed May 4, 2021. 2Global Economics and Investment Analysis (GEIA) monthly market roundup: May 2021. 3Bloomberg. April 30, 2021. 4GEIA monthly market roundup: May 2021. 5GEIA monthly market roundup: May 2021. 6Reuters: Brazil’s consumer confidence rises in April on economic recovery optimism. April 28, 2021. 7GEIA monthly market roundup. May 2021. 8GEIA monthly market roundup. May 2021. 9Trading Economics: Mexico inflation rate. Accessed May 6, 2021. 10GEIA monthly market roundup: May 2021. 11Bloomberg: Korea Inflation Hits Four-Year High as Pandemic’s Grip Eases. May 3, 2021. 12GEIA monthly market roundup: May 2021. 13GEIA monthly market roundup: May 2021. 14Gold.org: inflation falling and the US dollar pushed gold higher. May 6, 2021. 15World Bank: Commodities Price Data: April 2, 2021. 16GEIA monthly market roundup: May 2021.

Past performance is no guarantee of future results.

Market Makers

“Cyclical sectors like autos and banks continue to lead the recovery in Europe. Despite this, technology—a growth sector—is still strong. As travel restrictions ease and economies in the region open up, cyclical dominance is expected to continue. ”

The Global Investment and Economics Analysis team at BNY Mellon Investment Management

Going for Growth

“Countries with higher vaccination rates per percentage of their populations are likely to recover faster than those with lower vaccination rates.”

The Global Investment and Economics Analysis team at BNY Mellon Investment Management

Inflation Intelligence

“US inflation expectations are rising for both the short term and long term. Because the Federal Reserve has signaled it will keep policy easy, the dollar weakened in April.”

The Global Investment and Economics Analysis team at BNY Mellon Investment Management

Currencies and Commodities

DEFINITIONS

Two-year breakeven rate: Measures the difference between the 2-year Treasury note and Treasury Inflation Protected Securities. It serves as an indication of the market’s inflation expectation over the two-year horizon.

10-year breakeven rate: Measures the difference between the 10-year Treasury Bond and Treasury Inflation Protected Securities. It serves as an indication of the market’s inflation expectation over the 10-year horizon.

Bloomberg Commodity Index: The Dow Jones UBS Commodity index is designed to provide diversified commodity exposure with weightings based on the commodity’s liquidity and economic significance.

Brent oil: Brent is oil produced in the Brent oil fields and other sites in the North Sea. Together with WTI Crude, it is one of the most traded grades of oil.

Consumer Price Index: Index measures changes in the price level of market basket of consumer goods and services purchased by households.

FX: Refers to the global electronic marketplace for trading international currencies and currency derivatives.

MSCI EM: The MSCI EM index tracks the performance of Emerging Market Equities.

PMI: An economic indicator derived from monthly surveys of private sector companies. A level above 50 indicates expansion compared to the prior month and below 50 contraction.

S&P 500: A stock market index that measures stock performance of 500 large companies listed on the stock exchanges in the United States.

Spot prices: The current price in the marketplace at which a given asset can be bought or sold in the marketplace.

Stoxx Europe 600: The STOXX 600 is an index that represents the performance of 600 large, mid and small capitalization companies across 18 countries in the European Union. The index is hedged in USD.

USD: The US Majors Dollar Index tracks the performance of the USD versus a basket of foreign currencies including the euro, Japanese yen, Pound sterling, Canadian dollar, Swedish krona, and Swiss Franc.

WTI Crude: Generic West Texas Intermediate crude oil spot price.

ETFs trade like stocks, are subject to investment risk, including possible loss of principal. The risks of investing in the ETF typically reflect the risks associated with the types of instruments in which the ETF invests. Diversification cannot assure a profit or protect against loss.

ETF shares are listed on an exchange, and shares are generally purchased and sold in the secondary market at market price. At times, the market price may be at a premium or discount to the ETF’s per share NAV. In addition, ETFs are subject to the risk that an active trading market for an ETF’s shares may not develop or be maintained. Buying or selling ETF shares on an exchange may require the payment of brokerage commissions.

Bonds are subject to interest rate, credit, liquidity, call and market risks, to varying degrees. Generally, all other factors being equal, bond prices are inversely related to interest-rate changes and rate increases can cause price declines. High yield bonds involve increased credit and liquidity risk than higher rated bonds and are considered speculative in terms of the issuer’s ability to pay interest and repay principal on a timely basis. Equities are subject to market, market sector, market liquidity, issuer, and investment style risks to varying degrees. Small and midsized company stocks tend to be more volatile and less liquid than larger company stocks as these companies are less established and have more volatile earnings histories. Investing in foreign denominated and/or domiciled securities involves special risks, including changes in currency exchange rates, political, economic, and social instability, limited company information, differing auditing and legal standards, and less market liquidity. These risks generally are greater with emerging market countries.

Currencies can decline in value relative to a local currency, or, in the case of hedged positions, the local currency will decline relative to the currency being hedged. These risks may increase fund volatility. Commodities contain heightened risk including market, political, regulatory, and natural conditions, and may not be appropriate for all investors.

Past performance is no guarantee of future results.

This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular investment, strategy, investment manager or account arrangement, and should not serve as a primary basis for investment decisions. Please consult a legal, tax or financial professional in order to determine whether an investment product or service is appropriate for a particular situation.

Views expressed are those of the author stated and do not reflect views of other managers or the firm overall. Views are current as of the date of this publication and subject to change. The information in this presentation is based on current market conditions, which will fluctuate and may be superseded by subsequent market events or for other reasons.

BNY Mellon Investment Management is one of the world’s leading investment management organizations, encompassing BNY Mellon’s affiliated investment management firms, and global distribution companies. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may also be used as a generic term to reference the Corporation as a whole or its various subsidiaries generally. BNY Mellon ETF Investment Adviser, LLC is the investment adviser and BNY Mellon Securities Corporation is the distributor of the BNY Mellon ETF funds, both are subsidiaries of BNY Mellon.

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