Stock markets added to their strong year-to-date performance in July. The S&P 500 rose for the 4th straight month, touching new highs again. Stock markets outside the US outperformed domestic markets in July, helped largely by a declining dollar.

Markets abroad led stocks higher in Q2, continuing the trend from Q1 as signs of global economic activity improved further. Developed markets outside the US gained over 6.4% while the S&P 500 chugged along gaining 3.1%. So far for 2017, emerging markets have outpaced everything, gaining over 18%.

May felt a lot like April as stocks shook off more political noise to finish the month with modest gains. International markets continued to lead stocks higher despite some potential hiccups - most notably a re-emerging political crisis in Brazil. The Bovespa index fell over 8% in one day as the latest political corruption threatened to bring down Brazil’s new president. With R$2.37 trillion, the Bovespa is the world’s 13th largest stock exchange.

Volatility returned to the financial markets in April. Geo-political concerns were focused on rising tensions in North Korea, French elections, bombing in Syria, and the souring of the Putin/Trump bromance. Domestically, there was the threat of a government shutdown and uncertainty around the prospects for a Trump tax plan.

The S&P 500 gained 6.1% in Q1, after eking out a small 0.1% return in March. But it was the international markets that stood out. Emerging market equities gained 11.5% in Q1 and the developed markets outside the US added 7.4%. Some of the outperformance resulted from the pullback of the mighty US dollar, giving foreign investments an added boost from the currency appreciation.

Stocks added to their gains in February. The S&P 500 recorded an additional 4.0% return, putting the index up 5.9% for the year. The bond market saw some reprieve as treasury yields fell and the broad U.S. bond market gained 0.7% for the month. Those in the financial markets looking for a give‐back in the so‐called Trump reflation trade were disappointed as pretty much all broad asset classes showed positive returns.

In January, the U.S. equity market continued its momentum from the 2016 year-end rally. Large cap stocks gained 1.9% and the Dow Jones Industrial Average finally crossed the symbolic 20,000 level. Some of the so-called “Trumpflation” trades retreated in January. Bond prices recovered some previously lost ground as the yield on the 10-year Treasury fell. Fears of increased protectionism and adverse effects of a stronger dollar abated, helping emerging markets and international stocks outperform the S&P 500. After leading the market higher post-election, U.S.-centric small-cap stocks underperformed to start 2017.

In the end, what can be said about 2016? Unpredictable, perplexing and stunning come to mind. By any reasonable standard, the events of the past year were certainly unexpected, at least politically. At the beginning of 2016, it was not possible to envision a scenario where the UK would vote to leave the European Union and the U.S. would elect Donald Trump as the 45th president. Still, both happened and in hindsight, there were global signals that a populist uprising was at hand.

During the eight days leading up to the November presidential election, the S&P 500 gained a total of 0.7%, including dividends. Post-election, the S&P index gained 3.0%, ending the month with total gains of 3.7%. There were concerns that a Trump win would result in a dramatic increase in uncertainty and chaos in the financial markets. For a few hours as the results were tallied, that appeared to be the case. Now, there seems to be a sense of relief that all the uncertainty about the election has finally ended.

Investors were likely happy to see the month of October end. Besides the increasing rancor of a historically bitter election, there was a lackluster response to third quarter corporate earnings reports and rising bond yields.