Weekly Market Update, December 15, 2014
Presented by Manning Wealth Management
General market news
- The 10-year Treasury yield opened at 2.06 percent early Monday morning, continuing a weeklong slide from 2.35 percent last Monday. Technically, 2.20 percent and 2 percent are strong support levels for the 10-year, and a drop below 2 percent would be significant. Meanwhile, the 30-year Treasury yield went as low as 2.72 percent early Monday morning. U.S. 10-year yields are at their lowest since June 2013, while the 30-year hasn’t seen these levels since late 2012.
- Equity markets fell sharply last week, with both the Dow Jones Industrial Average and the S&P 500 Index losing more than 3 percent on the week. The sharp sell-off came on the back of a further drop in oil prices, which has revived concerns over global economic growth.
- With a lack of fundamental data, the market will continue to look to macroeconomic factors to gauge the overall health of the economy.
Equity Index | Week-to-Date % | Month-to-Date % | Year-to-Date % | 12-Month % |
S&P 500 | -3.47% | -3.07% | 10.48% | 15.10% |
Nasdaq Composite | -2.64% | -2.85% | 12.78% | 17.88% |
DJIA | -3.69% | -2.94% | 6.69% | 12.37% |
MSCI EAFE | -2.43% | -2.81% | -3.60% | 1.39% |
MSCI Emerging Markets | -4.00% | -5.77% | -3.24% | -1.92% |
Russell 2000 | -2.50% | -1.72% | 0.24% | 5.83% |
Source: Bloomberg
Fixed Income Index | Month-to-Date % | Year-to-Date % | 12-Month % |
U.S. Broad Market | 0.19% | 6.16% | 5.85% |
U.S. Treasury | 0.38% | 5.34% | 4.83% |
U.S. Mortgages | 0.17% | 6.28% | 6.03% |
Municipal Bond | 0.50% | 9.10% | 8.95% |
Source: Bloomberg
What to look forward to
A number of important data points will be released this week, as well as news on future interest rate policy from the Federal Open Market Committee (FOMC) meeting.
The week will begin with Industrial Production data, which is expected to show an increase after dipping last month, along with Housing Starts.
Just before the FOMC press conference on Wednesday, we will gain insight into consumer inflation with the release of Consumer Price Index data.
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.
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Manning Wealth Management is a financial advisor and consultant office located at 2550 5th Ave Suite 800 San Diego, CA 92103. They offer securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. They can be reached at 619-237-9977 or at www.manningwm.com
Authored by the Investment Research team at Commonwealth Financial Network.
© 2014 Commonwealth Financial Network®
