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
Gains in tech and energy stocks offset financial sector weakness to help Wall Street close higher Friday. Coming off highs, the S&P 500 and NASDAQ closed in the green while the Dow Jones closed slightly down. For the week, the Dow rose 0.05 to close at 21,394.76. The S&P gained 0.22 percent to finish at 2,438.30, and the NASDAQ climbed 1.84 percent to end the week at 6,256.25.
Returns Through 6/23/17 |
1 Week |
YTD |
1 Year |
3 Year |
5 Year |
Dow Jones Industrials (TR) |
0.05 |
9.58 |
21.84 |
10.85 |
13.93 |
NASDAQ Composite (PR) |
1.84 |
16.39 |
27.60 |
12.77 |
16.72 |
S&P 500 (TR) |
0.22 |
9.98 |
17.81 |
9.80 |
15.24 |
Barclays US Agg Bond (TR) |
0.17 |
2.86 |
1.38 |
2.85 |
2.35 |
MSCI EAFE (TR) |
-0.18 |
14.11 |
15.04 |
1.12 |
9.44 |
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.
Impact? — June’s federal rate hike was the Fed’s fourth in its current rate hike cycle. In the 18 months since its first rate hike on Dec. 16, 2015 (i.e., Dec. 16, 2015, to last Friday, June 16), the S&P 500 has gained 21.2 percent (total return), and the yield on the 10-year Treasury note has fallen from 2.30 percent to 2.15 percent (source: BTN Research).
Too Risky? — Of 18,336 adults surveyed in April 2017, just 54 percent own stocks (direct ownership or indirectly owned through a pooled investment) in their personal accounts or pre-tax retirement accounts (source: Gallup, BTN Research).
Back Working Again — During the global real estate recession that began in 2008, our national jobless rate peaked at 10 percent in October 2009, representing 15.4 million out-of-work Americans. The May 2017 jobless rate of 4.3 percent equates to 6.9 million individuals lacking employment (source: Department of Labor, 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 June 2017. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 1828992.1