Calm before the storm.....?
Submitted by Oram & Kaylor on May 15th, 2017Trying to accurately predict the movement of the financial markets is akin to predicting the weather. No one really knows, and we have to wait to see what actually happens.
The Markets
The Dow Jones broke 22,000 for the first time on Wednesday and closed at a record for the eighth time on Friday. July’s better-than-expected jobs report helped all three major indexes close higher. For the week, the Dow rose 1.22 percent to close at 22,092.81. The S&P gained 0.23 percent to finish at 2,476.83, and the NASDAQ dropped 0.36 percent to end the week at 6,351.56.
Returns Through 8/04/17 |
1 Week |
YTD |
1 Year |
3 Year |
5 Year |
Dow Jones Industrials (TR) |
1.22 |
13.33 |
23.44 |
12.88 |
13.84 |
NASDAQ Composite (PR) |
-0.36 |
17.99 |
22.94 |
13.15 |
16.44 |
S&P 500 (TR) |
0.23 |
11.93 |
16.83 |
10.83 |
14.65 |
Barclays US Agg Bond (TR) |
0.16 |
2.88 |
-0.16 |
2.67 |
2.11 |
MSCI EAFE (TR) |
0.87 |
17.80 |
20.25 |
3.36 |
9.05 |
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. The NASDAQ is based on price return, which is the capital appreciation of the portfolio, excluding income generated by the assets in the portfolio in the form of interest and dividends. (TR) indicates total return. (PR) indicates price return. MSCI EAFE returns stated in U.S. dollars.
No Big Pullback — The S&P 500 has gone 324 calendar days without a 2 percent or greater one-day drop, the longest stretch without a tumble of 2 percent or more since Feb. 27, 2007, or nearly 10.5 years ago (source: BTN Research).
Credit Downgrade — Saturday, Aug. 5, was the six-year anniversary of the United States being downgraded by S&P from a top credit rating. Since the downgrade, the yield on the U.S. 10-year Treasury note has fallen from 2.57 percent to 2.29 percent, and the S&P 500 has gained 134 percent (total return), equal to 15.3 percent per year (source: BTN Research).
Social Security Status Report — Sixty-one million Americans received Social Security benefits (retirement or disability) in 2016. Social Security’s total income (payroll taxes collected plus interest earnings) amounted to $957 billion last year, $35 billion more than the $922 billion of program expenditures and outlays. Social Security actuaries project the program will have just five more years (2017-2021) during which total income will exceed expenditures and outlays (source: 2017 Social Security Trustees Report, BTN Research).
* The Standard & Poor’s 500 (S& P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright August 2017. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#1865444.1