Weekly Market Commentary, July 3, 2018

July 3, 2018  | By Robare & Jones

The Markets

Stock markets finished the quarter on a down note. The S&P 500 and the global MSCI ACWI both dropped 1.3 percent. The Bloomberg BarCap Aggregate Bond Index shrugged off higher inflation and rose 0.3 percent last week.

The second quarter was a good one for U.S. stock investors. The S&P climbed 2.9 percent, erasing first quarter losses and leaving the index up 1.7 percent for 2018. Global stocks were down a tiny 0.1 percent in the second quarter and are down 1.5 percent on the year. Bonds posted a second straight quarter of losses, down 0.2 percent. Bonds are down 1.6 percent this year.

 

Data as of 06/29/2018 1-week YTD 1-Year 3-Year 5-Year 10-Year
Standard & Poor's 500 (Domestic Stocks) -1.3% 1.7% 12.3% 9.7% 11.0% 7.8%
Dow Jones Global ex-U.S. -1.1 -4.9 4.9 2.9 3.8 0.5
10-year Treasury Note (Yield Only) 2.9 NA 2.3 2.3 2.5 4.0
Gold (per ounce) -1.5 -3.6 0.6 2.1 0.1 3.0
Bloomberg Commodity Index 0.1 -0.9 7.5 -4.6 -7.0 -9.3
DJ Equity All REIT Total Return Index 0.9 1.3 4.9 9.4 9.0 8.3

S&P 500, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

Download Market Data Table

 

Economic News

Core PCE (personal consumption expenditures) finally reached the Federal Reserve’s stated target, almost. With some beneficial rounding, the Fed’s preferred measure of inflation reached its 2 percent target. It is the first time the measure has reached 2 percent in the last six years.

The May data suggest the trend is toward moderately higher inflation. May was the six month in a row the monthly data increased by 0.2 percent. Higher energy prices, which are not part of the core measure, continue to increase. The added boost from energy prices pushed overall prices up 2.3 percent over where they were last year.

 

Sources: Federal Reserve Bank of St. Louis, https://www.federalreserve.gov/monetarypolicy/openmarket.htm; PCEPI Personal Consumption Expenditures: Chain Price Index

Fun Story

George HW Bush enlists help of new service dog Sully

The Bush family added a new member last week, a service dog named Sully HW Bush. Sully is quite amazing. He can perform a two-page list of commands ranging from answering the phone to fetching needed items. Sully is the product of a nonprofit organization, America’s VetDogs, which provides service dogs to veterans free of charge. Sully even has an Instagram account to spread awareness of the importance of service dogs for individuals with disabilities.