Weekly Market Update for March 28, 2013

28 Mar

Weekly Market Update, March 25, 2013

Presented by Matthew J. Everson

 

General Market News

  • Early Monday morning, Treasury yields were approximately the same as they were one week ago. The 10-year yield stood at 1.95 percent on Monday, after testing the lower part of its trading range, 1.89 percent, late last week.
  • Equity markets reacted negatively last week to the news that Cyprus needed a bailout from the European Union. The S&P 500 was down as much as 1.5 percent in the first two days of trading before recouping some losses later in the week.
  • The language out of last Wednesday’s Federal Open Market Committee meeting was not much different than it was in January, as the Federal Reserve remains committed to its current asset purchasing pace.
  • Despite the holiday-shortened week, we’ll see plenty of fresh economic data, especially in the housing sector, which seems to be the great hope to drive economic growth in the next few quarters.

 

Equity Index Week-to-Date % Month-to-Date % Year-to-Date % 12-Month %
S&P 500 –0.24% 2.90% 9.69% 14.34%
Nasdaq Composite –0.11% 2.75% 7.74% 7.62%
DJIA –0.01% 3.39% 11.42% 14.31%
MSCI EAFE –1.47% 1.44% 5.85% 12.67%
MSCI Emerging Markets –1.79% –2.87% –2.86% 1.27%
Russell 2000 –0.63% 3.97% 11.69% 16.89%

Source: Bloomberg

 

Fixed Income Index Month-to-Date % Year-to-Date % 12-Month %
U.S. Aggregate –0.07% –0.27% 3.88%
U.S. Treasury –0.09% –0.38% 3.26%
U.S. Mortgage-Backed Securities 0.00% –0.16% 1.99%
Municipal Bond –0.53% 0.18% 5.58%
U.S. Treasury: U.S. TIPS –0.01% –0.65% 5.39%

Source: Bloomberg

 

What to Look Forward To

Orders for Durable Goods may have increased 3.8 percent in February, after having fallen 5.2 percent during the previous month. Removing the volatile transportation sector, orders may have grown 0.9 percent. Orders excluding transportation have risen in every month since last September.

 

Home values may have increased 0.51 percent nationally in January, if expectations about the S&P Case-Shiller 20-City Home Price Index are correct. This would mark nearly a full year of consecutive price increases; the last time prices fell was January 2012. Regionally, prices have increased more in areas that were initially hit hardest by the housing crisis (i.e., the South and West). The rebound has been more modest in the Northeast.

 

After rising 15.6 percent in January, New Home Sales may have given up some ground in February. There are now only 4.1 months of supply on the market at current purchase rates. This is quite low—and a bullish sign for the housing market.

 

The third revision of gross domestic product (GDP) for the fourth quarter of 2012 will be released on Thursday. Normally, this wouldn’t be a major focus, but analysts believe that growth may be revised up from 0.1 percent to 0.5 percent. The initial estimate was that GDP contracted, so this would be a positive sign.

 

Good news from the consumer is expected in February’s reports of Personal Income and Personal Spending. Income may have increased 0.9 percent, partially reversing the decline caused by higher payroll taxes, and spending may have risen 0.6 percent.

 

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.

###

 

Matthew J. Everson is a financial advisor located at MJ Everson Financial, 1423 13th Street, Santa Rosa, CA 95404. He offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. He can be reached at 707-968-7237.

Authored by the Investment Research team at Commonwealth Financial Network.

 

Authored by the Investment Research team at Commonwealth Financial Network.

 

© 2013 Commonwealth Financial Network®

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: