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June 27, 2016

BREXIT VOTE BATTERS GLOBAL MARKETS

The world reacted to the news Thursday night that U.K. voters had decided to leave the European Union. Germany’s DAX, France’s CAC-40, and Japan’s Nikkei 225 respectively ended their Friday trading sessionswith losses of 6.82%, 8.04%, and 7.92%. Wall Street was not hit as hard, but the Dow fell 3.39% Friday, while the Nasdaq declined 4.12% and the S&P 500 retreated 3.60%.1,2

A GAIN FOR EXISTING HOME SALES IN MAY

Last month, the pace of residential resales accelerated another 1.8%. According to the National Association of Realtors, the latest annual rate of 5.53 million sales marked a 9-year high. Separately, a Census Bureau report showed a 6.0% drop in new home buying in May.3

CONSUMER SENTIMENT GAUGE DECLINES IN JUNE

Displaying a final June reading of 93.5, the University of Michigan’s monthly consumer sentiment index finished the sixth month of the year 1.2 points below its final May mark. A year ago, the index was at 96.1.4 

STOCKS END ROCKY TRADING WEEK LOWER

Even with global markets plunging on Friday, weekly losses for the major U.S. indices were not extreme. The Nasdaq declined 1.92% across five days, while the Dow and S&P 500 respectively retreated 1.56% and 1.64%. As the dust settled Friday, the Dow closed the week at 17,399.86; the S&P, at 2,037.30; and the Nasdaq, at 4,707.98. Gold jumped $59.30 Friday to a COMEX close of $1,322.40. Oil settled at $47.64 Friday on the NYMEX.2,5

THIS WEEK: Global markets will react further to the Brexit on Monday; stateside, no major news releases are scheduled. Tuesday, an E.U. leadership summit begins in Brussels; the Conference Board presents its June consumer confidence index; the April Case-Shiller home price index appears; the BEA issues its final estimate of Q1 GDP; and Nike reports quarterly results. Wednesday, Federal Reserve chair Janet Yellen, European Central Bank president Mario Draghi, and Bank of England governor Mark Carney take part in a panel discussion at an ECB forum in Portugal; Wall Street will also pay attention to May pending home sales, May personal spending figures, and earnings news from General Mills, Monsanto, and Pier 1. Thursday, a new initial claims report complements earnings from ConAgra Foods, Constellation Brands, Darden Restaurants, and Paychex. Friday, investors consider ISM’s June U.S. manufacturing PMI and China’s latest factory PMI reading.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

-0.14

-3.15

+9.16

+5.83

NASDAQ

-5.98

-8.09

+15.49

+12.19

S&P 500

-0.32

-3.38

+12.12

+6.37

REAL YIELD

6/24 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.15%

0.48%

0.64%

2.64%


Sources: wsj.com, bigcharts.com, treasury.gov - 6/24/162,6,7,8 Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

Sincerely,

The Advisors at Sound Financial Strategies Group

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The opinions voiced in this article are for general information only. They are not intended to provide specific advice or recommendations for any individual and do not constitute an endorsement by CAMAS.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 - markets.on.nytimes.com/research/markets/worldmarkets/worldmarkets.asp [6/24/16]

2 - markets.wsj.com/us [6/24/16]

3 - investors.com/news/economy/new-home-sales-fall-6-jobless-claims-near-43-year-low/ [6/23/16] 

4 - investing.com/economic-calendar/michigan-consumer-sentiment-320 [6/24/16]

5 - cnbc.com/2016/06/24/us-markets.html [6/24/16]

6-bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F24%2F15&x=0&y=0 [6/24/16]

6-bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F24%2F15&x=0&y=0 [6/24/16]

6-bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F24%2F15&x=0&y=0 [6/24/16]

6-bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F24%2F11&x=0&y=0 [6/24/16]

6-bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F24%2F11&x=0&y=0 [6/24/16]

6-bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F24%2F11&x=0&y=0 [6/24/16]

6-bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F23%2F06&x=0&y=0 [6/24/16]

6-bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F23%2F06&x=0&y=0 [6/24/16]

6-bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F23%2F06&x=0&y=0 [6/24/16] 

7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/24/16]

8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/24/16]

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