Investment Commentary – June 24th, 2015

Dow – 17,966 (6/24/15 close) (0.80% YTD)
S&P 500 – 2,109 (6/24/15 close) (2.02% YTD)
NASDAQ – 5,122 (6/24/15 close) (8.16% YTD)
10-year Treasury – 2.32 % (6/24/15 close)
Gold-1,174 (6/24/2015 close) (52 week low $1,135/high $1,347)
Oil-60.28 (6/24/2015 close) (52 week low $48.74/high $96.72

  • Stocks rose for the week as investors welcomed dovish signals from the Federal Reserve and managed to contain worries about the stalled Greek debt negotiations. The Nasdaq Composite, S&P MidCap 400, and the Russell 2000 Indexes all established new highs on Thursday, with the technology-heavy Nasdaq finally surpassing the intraday record it established in March 2000. The large-cap benchmarks saw good gains but ended the week a bit below their all-time highs.
  • Analysts believe that while volatility may increase further as the Fed prepares to hike interest rates, improvement in both U.S. economic growth and corporate profits should offer investors some relief, while simultaneously providing a fundamental reason for equity markets to push higher.
  • If Greece were to default, who would be left holding the bag? Investors are almost giddy over signs Greece and its international creditors are moving toward a last-minute deal that would allow the country to avoid a default that many analysts fear could otherwise propel the country towards a euro zone exit. But even when things looked bleak, markets remained relatively calm
  • U.S. markets, both stocks and bonds, were appeased last week by soothing comments from the Federal Reserve. Bonds also rallied, with both short- and long-term rates retreating
  • European stocks leapt Monday, with their best session in six weeks fueled by the prospect that a deal for debt-burdened Greece may soon be reached. The Stoxx Europe 600 jumped 2.1% to 393.74, marking the strongest rise since May 8 as all sectors advanced, led by the telecommunications group FXK, -0.99%
  • High yield bonds look more attractive than Treasuries, but a diversified approach to fixed income investing seems appropriate given likely Fed tightening in 2015
  • Despite disappointing returns due to a stronger dollar in 2014, international exposure is still warranted given growth prospects abroad.

The views presented are not intended to be relied on as a forecast, research or investment advice and are the opinions of the sources cited and are subject to change based on subsequent developments. They are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy.

Disclosures:
http://individual.troweprice.com/public/Retail/Planning-&-Research/T.-Rowe-Price-Insights/Market-Analysis/Weekly-Wrap-Ups
https://www.jpmorganfunds.com/cm/Satellite?pagename=jpmfVanityWrapper&UserFriendlyURL=contentdet_module&smID=1158474955063
http://www.marketwatch.com/story/heres-who-is-most-exposed-to-a-greek-default-2015-06-23?link=MW_popular
https://www.blackrock.com/investing/insights/weekly-commentar
http://www.marketwatch.com/story/hopes-for-greek-deal-fuel-european-rally-2015-06-22