Presented by Rich Tegge
General market news
- Since January 30, the 10-year Treasury yield has moved from as low as 1.64 percent to slightly above 2 percent, giving back most of January’s performance. The 30-year yield has gone from 2.22 percent to 2.66 percent in the same time frame. The quick jump higher, while significant, could give way to lower yields again in the weeks and months to come.
- The broader equity markets continued to move higher last week, with large-cap, small-cap, technology, and blue-chip indices gaining a lot of ground. Led by Apple, U.S. tech stocks performed the best, and the NASDAQ gained 3.18 percent for the week.
- Continued improvements in U.S. companies’ earnings reports, increases in the price of oil, and better-than-expected GDP growth in Germany served to alleviate some global growth and deflation fears, which helped drive markets to record highs.
| Equity Index | Week-to-Date % | Month-to-Date % | Year-to-Date % | 12-Month % |
| S&P 500 | 2.10% | 5.28% | 2.12% | 16.96% |
| Nasdaq Composite | 3.18% | 5.73% | 3.55% | 16.93% |
| DJIA | 1.26% | 5.24% | 1.47% | 15.07% |
| MSCI EAFE | 0.65% | 2.32% | 2.84% | −0.25% |
| MSCI Emerging Markets | −0.70% | 1.06% | 1.66% | 5.61% |
| Russell 2000 | 1.50% | 5.01% | 1.63% | 7.98% |
Source: Bloomberg
| Fixed Income Index | Month-to-Date % | Year-to-Date % | 12-Month % |
| U.S. Broad Market | −1.24% | 0.83% | 5.32% |
| U.S. Treasury | −1.74% | 0.80% | 4.59% |
| U.S. Mortgages | −0.29% | 0.55% | 5.24% |
| Municipal Bond | −1.09% | 0.66% | 7.40% |
Source: Morningstar Direct
What to look forward to
The bulk of important data will be released around the middle of the week, including the latest Federal Open Market Committee meeting minutes. We will also see data on January Housing Starts, with activity expected to drop a bit after picking up last month.
The Producer Price Index will offer insight into producer inflation, which is expected to remain low. Finally, Industrial Production data is expected to show a pick-up in January with higher utilities output.
Disclosures: Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. All indices are unmanaged and are not available for direct investment by the public. Past performance is not indicative of future results. The S&P 500 is based on the average performance of the 500 industrial stocks monitored by Standard & Poor’s. The Nasdaq Composite Index measures the performance of all issues listed in the Nasdaq Stock Market, except for rights, warrants, units, and convertible debentures. The Dow Jones Industrial Average is computed by summing the prices of the stocks of 30 large companies and then dividing that total by an adjusted value, one which has been adjusted over the years to account for the effects of stock splits on the prices of the 30 companies. Dividends are reinvested to reflect the actual performance of the underlying securities. The MSCI EAFE Index is a float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a market capitalization-weighted index composed of companies representative of the market structure of 26 emerging market countries in Europe, Latin America, and the Pacific Basin. The Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000® Index. The Barclays Capital Aggregate Bond Index is an unmanaged market value-weighted performance benchmark for investment-grade fixed-rate debt issues, including government, corporate, asset-backed, and mortgage-backed securities with maturities of at least one year. The U.S. Treasury Index is based on the auctions of U.S. Treasury bills, or on the U.S. Treasury’s daily yield curve. The Barclays Capital Mortgage-Backed Securities (MBS) Index is an unmanaged market value-weighted index of 15- and 30-year fixed-rate securities backed by mortgage pools of the Government National Mortgage Association (GNMA), Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (FHLMC), and balloon mortgages with fixed-rate coupons. The Barclays Capital Municipal Bond Index includes investment-grade, tax-exempt, and fixed-rate bonds with long-term maturities (greater than 2 years) selected from issues larger than $50 million. The Barclays Capital U.S. Treasury Inflation Protected Securities (TIPS) Index measures the performance of intermediate (1- to 10-year) U.S. TIPS.
Rich Tegge is a financial consultant located at Wealth Strategy Group 300 S. Front Street Ste C Marquette Mi 49855. He offers securities as a Registered Representative of Commonwealth Financial Network®, Member FINRA/SIPC. He can be reached at 906-228-3696 or at rtegge@wsginvest.com.
Authored by the Investment Research team at Commonwealth Financial Network.
© 2015 Commonwealth Financial Network®