Is
this the beginning of a summer selloff?
Last
week was a turbulent one for equity markets. Key indices slid following
Wednesday remarks by Fed Chairman Ben Bernanke, signaling that the Fed may
scale back monetary stimulus later this year. For the week, the S&P 500
fell 2.11%, the Dow lost 1.8%, and the Nasdaq trimmed 1.94%.[i]
As
expected, news from the Fed dominated markets last week. Equities started the
week with steady gains, suggesting that investors expected mostly reassuring words
from the Fed. However, Wednesday’s official FOMC announcement and subsequent
comments by Ben Bernanke pushed markets to session lows. The Fed chairman
stated that, should economic conditions improve, the central bank could reduce
the pace of bond purchases this year and potentially end the quantitative
easing program entirely by mid-2014. He also said that economic conditions
appear to be improving, suggesting that downside risk to the economy from
tapering off quantitative easing programs may be low.[ii]
Recent
economic data supports Bernanke’s optimism. Home resales reached a 3-1/2 year
high in May and regional factory activity rebounded in June, suggesting that
the economy has some momentum behind it.[iii]
While government spending cuts and higher taxes stoked fears that the recovery
might stumble, it appears that the economy is still chugging along. Weekly
unemployment claims rose 18,000 last week to a seasonally adjusted level of
354,000. The four-week moving average, which is considered to be a less volatile
measure, increased to 348,250 – a level economists usually associate with
stable job gains.[iv]
In
the weeks and months ahead, it is likely that Fed policy will continue to drive
a measure of volatility. Even so, economic trends are showing modest improvement,
and markets don’t rise in a straight line. Volatility is a fact of life, and
short-term declines may present opportunities for value investing. We will
continue to keep our eyes open for both risks and opportunities with the
potential to affect our clients and will keep you informed.
ECONOMIC CALENDAR:
Monday: Dallas
Tuesday: Durable Goods Orders, S&P 500 Case-Shiller
HPI, New Home Sales, Consumer Confidence
Wednesday: GDP, EIA Petroleum Status Report
Thursday: Jobless Claims, Personal Income and
Outlays, Pending Home Sales Index
Friday: Chicago
HEADLINES:
Oil prices drop on Fed comments. Oil prices fell in the biggest
one-day drop since November 2012 on a combination of poor Chinese manufacturing
data and news that the Fed may begin tapering its quantitative easing programs.[v]
Median home prices surge. The median home price was $208,000 in
May, up 15.4% from a year ago, which is the largest year-over-year increase
since 2005. Prices are also at their highest level since July 2008.[vi]
Treasury prices falter. Treasury prices slid Friday, extending
a massive selloff in the government bond market last week that sent yields
dramatically higher after the Federal Reserve indicated it may scale back its
bond-purchase program later this year.[vii]
‘Change your
expectations for yourself: Expect the best,expect your fortunes to change, and
expect a miracle ! “ Dr. Waye Dyer
.
Share
the Wealth of Knowledge!
Please share this market update with family, friends, or colleagues. If you would like us to add them to our list, simply click on the "Forward email" link below. We love being introduced!
Please share this market update with family, friends, or colleagues. If you would like us to add them to our list, simply click on the "Forward email" link below. We love being introduced!
If
you would like to opt-out of future emails, please reply to this email with
UNSUBSCRIBE in the subject line.
.
Securities offered through Aurora Capital Member
FINRA/SIPC.
Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
Diversification
does not guarantee profit nor is it guaranteed to protect assets.
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 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 average of 30
significant stocks traded on the New York Stock Exchange and the NASDAQ. The
DJIA was invented by Charles Dow back in 1896.
The Nasdaq Composite is an index of the common stocks and similar
securities listed on the NASDAQ stock market and is considered a broad
indicator of the performance of stocks of technology companies and growth
companies.
The MSCI EAFE Index was created by Morgan Stanley Capital
International (MSCI) that serves as a benchmark of the performance
in major international equity markets as represented by 21 major MSCI
indexes from Europe, Australia
and Southeast Asia .
The
10-year Treasury Note represents debt owed by the United States Treasury to the
public. Since the U.S. Government is seen as a risk-free borrower, investors
use the 10-year Treasury Note as a benchmark for the long-term bond market.
Google
Finance is the source for any reference to the performance of an index between
two specific periods.
Opinions
expressed are subject to change without notice and are not intended as
investment advice or to predict future performance.
Past
performance does not guarantee future results.
You
cannot invest directly in an index.
Consult
your financial professional before making any investment decision.
Fixed
income investments are subject to various risks including changes in interest
rates, credit quality, inflation risk, market valuations, prepayments,
corporate events, tax ramifications and other factors.
. Neither the named representative nor the
named Broker dealer or Investment Advisor gives tax or legal advice. All
information is believed to be from reliable sources; however, we make no
representation as to its completeness or accuracy. Please consult your
financial advisor for further information.
By clicking on these links, you will leave
our server, as they are located on another server. We have not independently
verified the information available through this link. The link is provided to
you as a matter of interest. Please click on the links below to leave and
proceed to the selected site.
