Weekly Market Commentary, May 15, 2018

May 15, 2018  | By Robare & Jones

The Markets

A benign inflation report and positive news out of North Korea provided a boost for global stock markets. For the week, the S&P 500 soared 2.4 percent. Global stocks rose, as the MSCI ACWI climbed 2.1 percent. The Bloomberg BarCap Aggregate Bond Index was unchanged for the third straight week.

 

Data as of 05/11/2018 1-week YTD 1-Year 3-Year 5-Year 10-Year
Standard & Poor's 500 (Domestic Stocks) 2.4% 2.0% 13.9% 9.0% 10.8% 6.9%
Dow Jones Global ex-U.S. 1.7 0.4 12.8 3.3 3.5 0.2
10-year Treasury Note (Yield Only) 3.0 NA 2.4 2.3 1.9 3.8
Gold (per ounce) 1.1 2.2 8.3 3.7 -1.5 4.1
Bloomberg Commodity Index 0.1 2.1 8.3 -4.5 -7.4 -8.3
DJ Equity All REIT Total Return Index 1.2 -3.7 3.1 6.0 5.8 6.4

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

 

April’s inflation numbers came in slightly below expectations, which provided a boost to markets. April’s price index rose 0.2 percent, slightly less than the 0.3 percent expected. Over the last year, inflation rose 2.5 percent. A rapid increase in gasoline prices in April contributed to the strong number. The continued increase in oil prices will likely boost inflation again in May.

Core inflation, which excludes energy and food prices, rose 0.1 percent last month and has increased 2.1 percent over the last year. Energy and food prices often rise and fall more than other sectors.

The stock market reacted positively to the lower-than-expected numbers. Many investors remain concerned the long economic recovery and low unemployment rate will eventually lead to higher inflation.

 

Fun Story of the Week

Teachers pull out all the stops to gain credibility
Teaching has always been a challenge but gaining credibility in the smartphone era has become even tougher. An Australian teacher found her efforts to recreate McDonald’s Chicken McNuggets at home had the added benefit of raising her “cred” with students. It didn’t hurt the nuggets turned out to be quite tasty.