Investment Commentary –June 26th, 2018

Year to Date Market Indices as of Market Close June 26th, 2018
Dow 24,252 (-1.89%)
S&P 2,717 (1.63%)
NASDAQ 7,532 (9.11%)
Gold $1,258 (-4.64%)
OIL $69.08 (15.28%)
Barclay Bond Aggregate (-1.85%)
Fed Funds Rate 2.0% (last increase was 6/13/18)

Stocks Mixed After Selloff as Trade Worries Linger: Markets Wrap

U.S. stocks fluctuated after the biggest selloff since April, as investors assessed the outlook for trade and its implications on global growth. The dollar rose and gold fell.

The S&P 500 Index gyrated at its 50-day moving average, while the Dow Jones Industrial Average clung to small gains. Technology shares hit hardest Monday bounced back to give the NASDAQ indexes solid gains. Harley-Davidson Inc. slumped as President Donald Trump railed against the motorcycle maker for planning to move production abroad in response to tariffs. In Asia, Chinese equities entered a bear market on concern about the country’s ability to fight a trade war, while European shares bounced back from a

Trade remained front and center Tuesday as investors await more clarity from the White House on its plans. National Trade Council Director Peter Navarro contradicted comments from the Treasury regarding Chinese investment in the U.S. Europe and China look set to dig in against aggressive trade threats, which are increasingly showing up in business. As traders fret over the immediate outlook they also have doubts about the longer-term path for U.S. rates; the Treasury curve is the flattest in years, stoking fears about the prospect of a recession.

The week ahead:

Thursday: First-quarter GDP, third estimate, U.S. Bureau of Economic Analysis

Around the Web:

Down on the Dow

After posting mixed results for the previous week, the major U.S. stock indexes fell, with the Dow dropping 2%, more than twice as much as the S&P 500 and the NASDAQ. Thursday marked the Dow’s eighth daily decline in a row—the index’s longest losing streak since March 2017.

Trade retaliation

Shares of industrial firms dependent on global trade took another hit in the latest week as U.S., Chinese, and European officials took further steps to impose tariffs on imported goods. Concern also extended to the future of the North American Free Trade Agreement and the possibility that the United States could exit the pact.

Rough start

Mounting trade tensions weighed on stocks early in the week, as the Dow fell 103 points on Monday and tumbled 287 points on Tuesday. The other big daily decline came on Thursday, when the index dropped 196 points.

Approaching halftime

With one week to go before the halfway point of 2018, different segments of the U.S. equity market have exhibited sharply divergent returns. Year to date, growth stocks have outperformed value stocks by a wide margin and small caps have beaten large caps. Among major indexes, the NASDAQ has outperformed the S&P 500 and the Dow

Other Notable Indices (YTD)
Russell 2000 (small caps) 8.54
EAFE International -3.06
EAFE Emerging Markets -3.94
Shiller Annuity Index 4.85

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 investments.

https://www.bloomberg.com/news/articles/2018-06-25/asia-stocks-to-extend-global-slide-dollar-dips-markets-wrap