Capital Markets Outlook  |  Q1 2018

Market milestones of 2017

Global allocation insights

In 2017, market volatility sank to lows last seen over 50 years ago

  • Annual realized market volatility of 6.74% — lowest since 1964 (5.25%)
  • Two-month realized volatility for September/October below 4% — first time since 1964
  • Tightest two-week trading range (as of August 1) of the past 50 years (0.32%)

The VIX (S&P volatility index) made history

  • The VIX saw its lowest close ever on November 3 (9.14)
  • More than 50 of the VIX's 60 sub-10 closes happened in one year
  • The intraday high was 17.3, the lowest since 1995 (17.0)

The S&P 500 had a year for the record books

  • 60 record-high closes
  • The index gained more than 1% and lost more than 1% on only four days each
  • The index outperformed the energy sector by 26 percentage points — the largest relative outperformanced since the S&P beat the technology sector during the dotcom collapse in 2000 (30 percentage points)
  • There have been 295 trading days since a peak-to-trough 3% decline (on the Friday before the 2016 U.S. election)
  • 383 days since a 5% correction (after the U.K.'s Brexit referendum)
  • 2,222 days since a 20% correction (at the end of the Great Recession)
  • Every month had a positive total return (first time ever, since tracking of daily data began in 1929)

Source: Data compiled by Putnam.

Fed tightens as world policy stays easy

Jason Vaillancourt, Co-Head of Global Asset Allocation, talks about the status of monetary policy in the U.S. and among other central banks.

Quarterly Capital Markets Views
Asset allocation
Weighting shifts from the previous quarter
Asset allocations

Market performance trends
Capital Markets Outlook represents the views of Putnam's senior investment leaders.

Robert Schoen
Chief Investment Officer, Global Asset Allocation

James Fetch
Co-Head of Global Asset Allocation

Jason Vaillancourt, CFA
Co-Head of Global Asset Allocation