Weekly Market Update, January 19, 2016

Presented by Nick Bautista, CFP®

                                 

General market news

  • Financial markets continued to show weakness last week, with concerns centered around geopolitical instability, commodity price deteriorations, corporate earnings, and uncertainty over central bank actions.
  • Sustained volatility in global equity markets drove Treasury yields lower over the past week. The 10-year Treasury traded as low as 2.01 percent on Friday, down from a 2.26-percent yield at the beginning of the year.
  • Domestic equity markets were weak across the board, adding to the losses since the start of the year. Technology and biotech stocks were hit particularly hard, pushing the Nasdaq Composite Index down 3.34 percent last week. Small-cap stocks were also relatively weak, with a loss of 3.65 percent for the Russell 2000 Index.
  • As volatility continued to increase, the VIX closed last week at 27—its highest level since August and September of last year, when the markets experienced similar weakness.

 

Equity Index Week-to-Date Month-to-Date Year-to-Date 12-Month
S&P 500 −2.15% −7.93% −7.93% −3.63%
Nasdaq Composite −3.34% −10.34% −10.34% −0.52%
DJIA −2.16% −8.16% −8.16% −5.39%
MSCI EAFE −1.66% −7.70% −7.70% −6.36%
MSCI Emerging Markets −2.28% −8.92% −8.92% −22.75%
Russell 2000 −3.65% −11.24% −11.24% −11.51%

  Source: Bloomberg

 

Fixed Income Index Month-to-Date Year-to-Date 12-Month
U.S. Broad Market 0.97% 0.97% 0.17%
U.S. Treasury 1.49% 1.49% 0.50%
U.S. Mortgages 0.80% 0.80% 1.84%
Municipal Bond 0.94% 0.94% 2.82%

  Source: Morningstar Direct

 

What to look forward to  

This week, we turn our attention to consumer inflation and the Consumer Price Index, with prices expected to have been flat in December.

 

We will also see housing market data with releases of Housing Starts and Existing Home Sales.

 

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.
Nick Bautista is a financial advisor located at 19712 MacArthur Blvd. Ste 225, Irvine CA 92612. 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 949-333-6394 or at nick@phillipswealthmanagement.com

 

Authored by the Investment Research team at Commonwealth Financial Network.

 

© 2016 Commonwealth Financial Network®

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