weekly market review weekly review · 2018-07-09 · weekly market review talking points • among...

Weekly Market Review

Talking Points

• Among equities, large-caps outperformed small-caps, and growth stocks outperformed value-oriented issues. Domestic stocks underperformed international equities. Developed markets underperformed emerging market stocks.

• Treasury prices were little changed on the week. The yield on the 10-year T-note declined slightly.

• Commodity prices were sharply lower the week. Crude oil, precious metals and grains all declined.

• The dollar was slightly higher against a basket of currencies.

• Among economic data released this week, consumer prices fell in March, housing data was mixed, industrial production rose and jobless claims were slightly above expectations.

Weekly Highlights

• Domestic stock prices sold off this week. Investors reacted to sluggish first quarter earnings reports by taking profits this week. According to Bloomberg, 103 of the S&P 500’s companies have so far reported, with average earnings growth in the quarter trailing that of the previous quarter. Analysts expect an acceleration in earnings growth beginning in the third quarter of 2013. Stocks also reacted negatively to the plunge in commodities prices, which is an indication of investor expectations of a slowing economy.

• Global markets also consolidated on the week. With the exception of certain Asian markets, world equity markets followed the lead of the U.S., posting broad losses. German stocks fell for a sixth straight day today, the longest streak since November 2011, due to disappointing earnings reports.

• Treasury prices were little changed this week. Yields on the benchmark 10-year Treasury were slightly lower. Many analysts believe that Treasury prices are somewhat expensive, and that yields could rise.

• Commodity indexes plunged this week. Each of the three major complexes – energy, precious metals and grains – all declined this week on slowing economic growth.

Chart of the Week

April 19, 2013 Weekly Review April 19, 2013

EWM Weekly Market Review

2

April 19, 2013

MARKET DASHBOARD

Source: Bloomberg

VIX Index

Last Price

1.7010-Year US Treas.

DJ UBS Comm. Idx.

Gold

Crude Oil

Dollar Index

4.84

131.51

$1,402.45

$87.90

82.74

14.88

-2 bps

-2.38

-$83.13

-$3.36

0.06

Change

40.1%

YTD %

-1 bps

-5.5%

-16.5%

-5.6%

3.3%

-6.2%

% Chg.

NM

-1.8%

-5.6%

-3.7%

0.1%

Change

-1.1%

% Chg.

-2.4%

-2.3%

-2.8%

-4.0%

-2.5%

1.7%

YTD %

8.7%

10.8%

6.1%

6.6%

2.0%

-344.39

-91.76

-37.54

Shanghai Composite

-7.18

S&P 500

Dow Industrials

Nasdaq

Russell 2000

Euro Stoxx Index

37.86

Last Price

1,555.14

14,547.51

3,206.06

912.50

285.21

2,244.64

-38.52

0.7

0.8

0.9

1

1.1

1.2

1.3

Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13

Source: Bloomberg

Wealth Index|Growth of $1: Trailing 24 Months

S&P 500 Dow Industrials Small Cap EAFE Emerging Mkts.

L

S

Source: B loomberg

YTD

Value Growth

9.46% 8.22% 6.95%

10.56% 9.84% 9.00%

7.41%6.59%5.83%

One Week

Value Growth

-2.61% -2.55% -2.49%

-3.07% -2.81% -2.49%

-4.15% -3.98% -3.80%1200

1250

1300

1350

1400

1450

1500

1550

1600

1650

Source: Bloomberg

S&P 500 Index: Trailing 180 Days

% Wgt in

S&P 500

Week %

Chg. YTD % Chg.

Consumer Discretionary 11.8 -2.78% 11.4%

Consumer Staples 11.4 0.18% 16.7%

Energy 10.5 -3.99% 3.8%

Financials 16.0 -2.87% 9.3%

Health Care 13.1 -1.49% 18.1%

Industrials 9.9 -3.81% 6.0%

Information Technology 17.4 -4.18% -0.8%

Materials 3.3 -2.96% -0.3%

Telecom Services 3.2 0.13% 13.2%

Utilities 3.7 0.12% 15.4%

Source: Bloomberg

Sector Performance: S&P/GICS Sectors

10

12

14

16

18

20

22

24

Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13

Source: Bloomberg

VIX Index: Trailing 180 Days


3

April 19, 2013

134135136137138139140141142143144 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11Index S&P/Case-Shiller Home Price Index-Trailing 12 Mos.

Source: Bloomberg

THE ECONOMY AND MARKETS

A Macro View In a week marred by the bombing tragedy in Boston, investors took profits, primarily as a result of lackluster first quarter earnings reports. According to Bloomberg data, 103 of the companies comprising the S&P 500 have reported earnings so far, with results coming in somewhat below expectations. The consensus among analysts is that first quarter earnings will be down -1.1% once all companies have reported. The sectors with the poorest results in the quarter so far have been energy, which has suffered as a result of a drop in oil prices, and health care. The sectors with the strongest reports on a relative basis have been telecommunications services and financials. Stocks have also responded to lowered guidance by company executives. Emerging markets stocks rebounded this week relative to developed markets, primarily as a result of investor anticipation that the Chinese government will take action to spur flagging economic growth. The Shanghai Composite Index bucked the trend, gaining 1.7% for the week and leading emerging markets higher. Since the beginning of 2012, the S&P 500 has outperformed emerging markets stocks by about 1500 basis points, making emerging markets attractively valued on a relative basis. We believe that an overweight to emerging markets within an international equity allocation is warranted for investors who are more opportunistically inclined.

-0.3

-0.2

-0.1

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13

Mo

nth

ly %

Ch

g.

Consumer Price Index-Trailing 12 Mos.

Headline CPI Core CPISource: Bloomberg

0

0.5

1

1.5

2

2.5


% C

han

ge Y

ear/

Year

Consumer Price Index-Trailing 12 Mos.

Source: Bloomberg

In terms of fixed-income investments, activity was quiet this week, but many analysts believe the run-up in prices – and attendant decline in yields – experienced over the past few weeks has been overdone, and that Treasurys are now expensive. Part of the rise has been due to the significant decline in inflation expectations that has occurred in recent months (please see nearby graph). Last week, the producer price index declined dramatically and was followed by this week’s report that consumer prices also fell. The drops prompted fears of renewed deflation and anticipation of continued Fed monetary aggressiveness. Inflation expectations are at their lowest level in many months and could rise again with renewed central bank stimulus. In such a scenario, we believe TIPS should perform well relative to other Treasury securities.


4

April 19, 2013

134135136137138139140141142143144 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11Index S&P/Case-Shiller Home Price Index-Trailing 12 Mos.

Source: Bloomberg

THIS WEEK IN THE ECONOMY AND MARKETS

300

310

320

330

340

350

360

370

380

390

400

1/25 2/8 2/22 3/8 3/22 4/5

Tho

usa

nd

s

Initial Jobless Claims-Trailing 12 Wks.

Source: Bloomberg

0

200

400

600

800

1000

1200


Tho

usa

nd

s

Housing Starts (Annualized) - Trailing 12 Mos.

Source: Bloomberg

0

100

200

300

400

500

600

700

800

900

1000


Tho

usa

nd

s

Building Permits - Trailing 12 Mos.

Source: Bloomberg

-1

-0.5

0

0.5

1

1.5


% C

han

ge

Industrial Prod. (Monthly Chng)-Trailing 12 Mos.

Source: Bloomberg

15

20

25

30

35

40

45

50


Ind

ex

NAHB Housing Index (Monthly % Chg)-Trailing 12 Mos.

Source: Bloomberg

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0


Ind

ex

Emprie State Manufacturing Index - Trailing 12 Mos.

Source: Bloomberg

EWM Weekly Market Review April 19, 2013

EUROZONE CRISIS

5

Last Change % Chg. YTD % Last Change % Chg. YTD %

Germany 10-Yr. Govt. 1.14 -1 bps NM NM France 10-Yr. Govt. 1.67 -1 bps NM NM

Greece 10-Yr. Govt. 11.30 8 bps NM NM Irish 10-Yr. Govt. 3.38 -13 bps NM NM

Italy 10-Yr. Govt. 4.01 -10 bps NM NM Portugal 10-Yr. Govt. 5.82 -28 bps NM NM

Spain 10-Yr. Govt. 4.44 -7 bps NM NM Netherlands 10-Yr. Govt. 1.46 -3 bps NM NM

Belgium 10-Yr. Govt. 1.73 -3 bps NM NM U.K. 10-Yr. Govt. 1.51 -6 bps NM NM

Source: Bloomberg

SELECTED EUROPEAN SOVEREIGN YIELD PERFORMANCE

1.0

1.1

1.2

1.3

1.4

1.5

1.6

1.7

1/21 2/4 2/18 3/4 3/18 4/1 4/15

%

Germany 10-Year Government Bond Yield

Source: Bloomberg

4.0

4.2

4.4

4.6

4.8

5.0

5.2

5.4

1/21 2/4 2/18 3/4 3/18 4/1 4/15

%

Spain 10-Year Government Bond Yield

Source: Bloomberg

3.4

3.6

3.8

4.0

4.2

4.4

4.6

4.8

1/21 2/4 2/18 3/4 3/18 4/1 4/15

%

Italy 10-Year Government Bond Yield

Source: Bloomberg

10

11

11

12

12

13

13

1/21 2/4 2/18 3/4 3/18 4/1 4/15

%

Greece 10-Year Government Bond Yield

Source: Bloomberg


EQUITIES

6


S&P 500 1,555.21 -38.52 -2.42% 8.70% CAC 40 Index (France) 3,651.96 -77.34 -2.07% 0.30%

Dow Industrials 14,547.51 -344.39 -2.32% 10.81% DAX Index (Germany) 7,459.96 -284.81 -3.68% -2.00%

Nasdaq Composite 3,206.06 -91.76 -2.78% 6.08% Irish Overall Index 3,810.99 -68.83 -1.77% 12.20%

S&P/TSX (Canada) 12,064.72 -331.48 -2.69% -3.44% Nikkei 225 13,316.48 -168.66 -1.25% 28.10%

Mexico IPC 42,808.17 -1551.88 -3.53% -2.87% Hang Seng Index 22,013.57 -75.48 -0.34% -2.84%

Brazil Bovespa 53,897.56 -1503.74 -2.74% -12.29% Shanghai Composite 2,244.64 37.86 1.72% -1.08%

Euro Stoxx 600 285.21 -7.18 -2.46% 1.98% Kospi Index (S. Korea) 1,906.75 -17.48 -0.91% -4.52%

FTSE 100 6,286.59 -97.80 -1.53% 6.59% Taiwan Taiex Index 7,930.80 109.17 1.40% 3.00%

IBEX 35 (Spain) 7,915.50 -124.90 -1.55% -3.09% Tel Aviv 25 index 1,203.74 -26.38 -2.14% 1.53%

Swiss Market Index 7,618.76 -141.84 -1.83% 11.67% MICEX Index (Russia) 1,339.67 -46.80 -3.38% -9.20%Source: Bloomberg

WORLD MARKET PERFORMANCE

3,000

3,050

3,100

3,150

3,200

3,250

3,300

3,350

1/18 2/1 2/15 3/1 3/15 3/29 4/12

Ind

exNasdaq Composite-Trailing 90 Days

Source: Bloomberg

2,050

2,100

2,150

2,200

2,250

2,300

2,350

2,400

2,450

2,500

1/18 2/1 2/15 3/1 3/15 3/29 4/12

Ind

ex

Shanghai Composite Index-Trailing 90 Days

Source: Bloomberg

275

280

285

290

295

300

1/18 2/1 2/15 3/1 3/15 3/29 4/12

Ind

ex

Euro Stoxx Index-Trailing 90 Days

Source: Bloomberg

13,000

13,200

13,400

13,600

13,800

14,000

14,200

14,400

14,600

14,800

15,000

1/18 2/1 2/15 3/1 3/15 3/29 4/12

Ind

ex

Dow Jones Industrials -Trailing 90 Days

Source: Bloomberg


EQUITIES – EMERGING AND FRONTIER MARKETS

7


Mexico IPC 42,808.17 -1551.88 -3.5% -2.9% Hang Seng Index 22,013.57 -75.48 -0.3% -2.8%

Brazil (Bovespa Index) 53,897.56 -1503.74 -2.7% -12.3% India (Sensex 30) 19,016.46 773.90 4.2% -2.1%

MICEX Index (Russia) 1,339.67 -46.80 -3.4% -9.2% Malaysia (KLCI Index) 1,706.28 7.75 0.5% 1.0%

Czech Republic (Prague) 941.56 -37.34 -3.8% -9.4% Singapore (Straits Times Index) 3,294.05 -0.14 0.0% 4.0%

Turkey (Istanbul) 83,285.44 -1517.39 -1.8% 6.2% Thailand (SET Index) 1,545.46 18.14 1.2% 11.0%

Egypt (Hermes Index) 536.80 2.55 0.5% -2.6% Indonesia (Jakarta) 4,998.46 61.25 1.2% 15.8%

Kenya (Nairobi 20 Index) 4,868.29 -117.90 -2.3% 18.6% Pakistan (Karachi KSE 100) 18,631.21 -83.07 -0.4% 10.2%

Saudi Arabia (TASI Index) 7,060.04 -177.79 -2.5% 3.8% Vietnam (Ho Chi Minh) 473.21 -21.06 -4.3% 14.4%

Lebanon (Beirut BLOM Index) 1,232.73 8.74 0.7% 5.4% Sri Lanka (Colombo) 5,882.25 42.37 0.7% 4.2%

Palestine 459.20 7.52 1.7% -3.9% Cambodia (Laos) 1,331.70 1.02 0.1% 9.6%Source: Bloomberg

EMERGING AND FRONTIER MARKET PERFORMANCE

50,000

52,000

54,000

56,000

58,000

60,000

62,000

64,000

1/18 2/1 2/15 3/1 3/15 3/29 4/12

Ind

ex

Brazil (Bovespa Index)-Trailing 90 Days

Source: Bloomberg

17,000

17,500

18,000

18,500

19,000

19,500

20,000

20,500

1/18 2/1 2/15 3/1 3/15 3/29 4/12

Ind

ex

India (Sensex Index)-Trailing 90 Days

Source: Bloomberg

400

420

440

460

480

500

520

540

560

580

600

1/20 2/3 2/17 3/3 3/17 3/31 4/14

Ind

ex

Egypt (Hermes Index)-Trailing 90 Days

Source: Bloomberg

3,140

3,160

3,180

3,200

3,220

3,240

3,260

3,280

3,300

3,320

3,340

1/18 2/1 2/15 3/1 3/15 3/29 4/12

Ind

ex

Singapore (Straits Times Index)-Trailing 90 Days

Source: Bloomberg


INTEREST RATES

YIELD CURVES

8


2-Yr. U.S. Treasury 0.23% 0 bps NM NM Prime Rate 3.25% 0.00 NM NM

5-Yr. U.S. Treasury 0.71% 1 bps NM NM Fed Funds Rate 0.25% 0.00 NM NM

10-Yr. U.S. Treasury 1.70% -2 bps NM NM Discount Rate 0.75% 0.00 NM NM

30-Yr. U.S. Treasury 2.88% -4 bps NM NM LIBOR (3 Mo.) 0.28% 0 bps NM NM

German 10-Yr. Govt. 1.25% 1 bps NM NM Bond Buyer 40 Muni 3.87% -4 bps NM NM

France 10-Yr. 1.79% 1 bps NM NM Bond Buyer 40 G.O. 3.89% NA NM NM

Italy 10-Yr. 4.22% 8 bps NM NM Bond Buyer 40 Rev. 4.28% NA NM NM

Fed 5-Yr Fwd BE Inf. 2.75% 6 bps NM NM

Source: Bloomberg

SELECTED INTEREST RATES

1M 1Y 3Y 5Y 8Y 10Y 15Y 20Y 30Y0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

US Treasury Actives Curve 20130412

US Treasury Actives Curve 20130419

USD US Industrial (B) BFV Curv 20130419

USD Composite (BBB) BFV Curve 20130419

1.40

1.50

1.60

1.70

1.80

1.90

2.00

2.10

10/22 11/22 12/22 1/22 2/22 3/22

Ind

ex

10-Year Treasury Yield - Trailing 180 Days

Source: Bloomberg

1.50

1.55

1.60

1.65

1.70

1.75

1.80

1.85

1.90

10/22 11/22 12/22 1/22 2/22 3/22

Ind

ex

BBB/Baa- 10-Yr Treas. Spread Rising Line = Risk Aversion

Source: Bloomberg

Source: Bloomberg


CURRENCIES

9

77

78

79

80

81

82

83

84

10/22 11/22 12/22 1/22 2/22 3/22

U.S. Dollar Index - Trailing Six Months

Source: Bloomberg

1.22

1.24

1.26

1.28

1.30

1.32

1.34

1.36

1.38

10/22 11/22 12/22 1/22 2/22 3/22

Euro - U.S. Dollars per Euro

Source: Bloomberg

75.00

80.00

85.00

90.00

95.00

100.00

105.00

10/22 11/22 12/22 1/22 2/22 3/22

Japanese yen - Yen per U.S. Dollar

Source: Bloomberg


Dollar Index 82.74 0.305 0.37% 3.57% Chinese Yuan 6.18 -0.014 0.23% 0.86%

Euro 1.31 -0.006 -0.43% -1.03% Swiss Franc 0.93 0.006 -0.60% -1.88%

Japanese Yen 99.57 0.850 -0.86% -12.57% New Zealand Dollar 0.84 -0.016 -1.85% 1.71%

British Pound 1.52 -0.011 -0.74% -6.31% Brazilian Real 2.01 0.041 -2.02% 2.06%

Canadian Dollar 1.03 0.013 -1.28% -3.37% Mexican Peso 12.28 0.173 -1.41% 4.94%

SELECTED CURRENCY PERFORMANCE

Source: Bloomberg

6.12

6.14

6.16

6.18

6.20

6.22

6.24

6.26

6.28

10/22 11/22 12/22 1/22 2/22 3/22

Chinese yuan - yuan per U.S. Dollar

Source: Bloomberg


COMMODITIES

10

75

80

85

90

95

100

10/22 11/22 12/22 1/22 2/22 3/22

$ p

er b

arre

l

Crude Oil - Light Crude ($ per barrel)

Source: Bloomberg

1,300

1,350

1,400

1,450

1,500

1,550

1,600

1,650

1,700

1,750

1,800

10/22 11/22 12/22 1/22 2/22 3/22

$ p

er o

un

ce

Gold - Spot gold price ($ per ounce)

Source: Bloomberg

6,000

6,500

7,000

7,500

8,000

8,500

10/22 11/22 12/22 1/22 2/22 3/22

Ind

ex

Copper

Source: Bloomberg

500

550

600

650

700

750

800

10/22 11/22 12/22 1/22 2/22 3/22

$ p

er b

ush

el

Corn - Active Contract

Source: Bloomberg


DJ UBS Comm. Idx. 131.51 -2.38 -1.78% -5.46% Platinum Spot $1,427.20 -$64.70 -4.35% -7.66%

Rogers Int. Comm. Idx. 3489.24 -122.58 -3.39% -5.50% Corn 633.00 -8.00 -1.25% -9.18%

Crude Oil $87.88 -$3.36 -3.68% -5.61% Wheat 711.50 -9.50 -1.32% -10.55%

Natural Gas $4.41 $0.17 3.91% 27.05% Soybeans 1,382.50 3.50 0.25% -0.90%

Gasoline ($/Gal.) $3.51 -$0.04 -0.99% 6.50% Sugar 17.88 -0.03 -0.17% -9.78%

Heating Oil 279.25 -8.58 -2.99% -7.86% Orange Juice 146.95 4.95 3.46% 22.18%

Gold Spot $1,402.08 -$83.13 -5.61% -16.46% Aluminum 1,911.50 58.00 3.13% -7.79%

Silver Spot $23.21 -$2.79 -10.74% -23.52% Copper 7,088.00 -318.50 -4.30% -10.63%

Source: Bloomberg

SELECTED COMMODITY MARKET PERFORMANCE


ALTERNATIVE INVESTMENTS

11

1,150

1,155

1,160

1,165

1,170

1,175

1,180

1,185

1,190

1/22 2/5 2/19 3/5 3/19 4/2 4/16

Ind

ex

HFRX Global Hedge Fund Index - Trailing 90 Days

Source: Bloomberg

924

926

928

930

932

934

936

938

940

942

944

946

1/22 2/5 2/19 3/5 3/19 4/2 4/16

Ind

ex

HFRX Equity Market Neutral - Trailing 90 Days

Source: Bloomberg

1,220

1,230

1,240

1,250

1,260

1,270

1,280

1/22 2/5 2/19 3/5 3/19 4/2 4/16

Ind

ex

IQ Fixed Income Beta Arb Index - Trailing 90 Days

Source: Bloomberg

1,040

1,050

1,060

1,070

1,080

1,090

1,100

1,110

1/22 2/5 2/19 3/5 3/19 4/2 4/16

Ind

ex

HFRX Equity Hedge Index - Trailing 90 Days

Source: Bloomberg


HFRX Global Hedge Fund Index 1186.64 -5.58 -0.47% 2.86% HFRX Distressed Index 969.38 -0.97 -0.10% 1.73%

HFRX Equity Market Neutral 943.02 -3.82 -0.40% 0.43% HFRX Merger Arbitrage Index 1535.99 -2.63 -0.17% 1.74%

HFRX Equity Hedge Index 1102.50 -11.48 -1.04% 3.92% HFRX Convertible Arbitrage Index 738.13 -0.76 -0.10% 5.16%

HFRX Event-Driven Index 1464.42 -11.56 -0.79% 4.98% HFRX Macro CTA Index 1153.04 1.48 0.13% 0.41%

HFRX Absolute Return Index 959.39 -0.74 -0.08% 0.44% IQ Fixed Income Beta Arb Index 1271.14 -0.74 -0.06% 2.71%

Source: Bloomberg

SELECTED ALTERNATIVE INVESTMENT INDEX PERFORMANCE


0.315

0.320

0.325

0.330

0.335

0.340

0.345

0.350

10/22 11/22 12/22 1/22 2/22 3/22

Ind

ex

High Yield/Inv. Grade Bonds - Trailing 180 Days

Source: Bloomberg

2.40

2.45

2.50

2.55

2.60

2.65

2.70

10/22 11/22 12/22 1/22 2/22 3/22

Ind

ex

S&P 500/MSCI EAFE - Trailing 180 Days

Source: Bloomberg

1.15

1.20

1.25

1.30

1.35

1.40

1.45

1.50

10/22 11/22 12/22 1/22 2/22 3/22In

dex

MSCI EAFE/MSCI EM - Trailing 180 Days

Source: Bloomberg

2.90

3.00

3.10

3.20

3.30

3.40

3.50

3.60

3.70

3.80

3.90

10/22 11/22 12/22 1/22 2/22 3/22

Ind

ex

S&P 500/MSCI EM - Trailing 180 Days

Source: Bloomberg

0.35

0.36

0.37

0.38

0.39

0.40

0.41

0.42

10/22 11/22 12/22 1/22 2/22 3/22

Ind

ex

Large Cap/Small Cap - Trailing 180 Days

Source: Bloomberg

0.53

0.53

0.54

0.54

0.55

0.55

0.56

0.56

0.57

0.57

0.58

10/22 11/22 12/22 1/22 2/22 3/22

Ind

ex

Growth/Value - Trailing 180 Days

Source: Bloomberg

0.180

0.185

0.190

0.195

0.200

0.205

0.210

10/22 11/22 12/22 1/22 2/22 3/22

Ind

ex

Info Tech/S&P 500 - Trailing 180 Days

Source: Bloomberg

1.80

1.81

1.82

1.83

1.84

1.85

1.86

1.87

10/22 11/22 12/22 1/22 2/22 3/22

Ind

ex

Inv. Grade Bonds/Int. Govt. Bonds - Trailing 180 Days

Source: Bloomberg

0.57

0.58

0.59

0.60

0.61

0.62

0.63

0.64

10/22 11/22 12/22 1/22 2/22 3/22

Ind

ex

High Yield Bonds/Int. Govt. Bonds - Trailing 180 Days

Source: Bloomberg

April 19, 2013

12

PORTFOLIO CONSTRUCTION


13

April 19, 2013

The Relative Strength Matrix provides an indication of how the various asset classes have performed relative to one another over the past 30 days. A number greater than 1.0 indicates that the asset class in the far left column has outperformed the corresponding asset class in the top row over the past 30 days. A number below 1.0 means the asset class on the left has underperformed the asset class at the top. The green shading indicates outperformance, and the red shading indicates underperformance.

Source: Bloomberg

2/14 2/21 2/28 3/7 3/14 3/21 3/28 4/4 4/11 4/18

Large Cap

(R200)0.67% -1.08% 0.72% 1.99% 1.10% -1.05% 1.50% -0.37% 2.02% -3.15%

Small Cap

(R2000)1.72% -1.99% 0.63% 2.57% 1.98% -0.96% 0.81% -2.72% 2.31% -4.81%

MSCI EAFE 0.69% -1.34% 1.06% 0.89% 1.00% -0.77% -0.70% -0.92% 3.91% -3.27%

MSCI Em.

Mkts.0.59% -1.19% 0.14% 0.31% -0.97% -2.41% 1.00% -1.51% 1.20% -3.10%

BarCap Agg.

(AGG)-0.01% 0.01% 0.53% -0.62% -0.03% 0.24% 0.33% 0.14% -0.04% 0.35%

High Yield

(JNK)0.79% 0.07% 0.28% -0.01% 0.39% 0.02% 0.12% -0.66% 0.81% -0.27%

DJ UBS Index -1.11% -1.99% -0.19% 0.15% 1.07% -0.17% -0.38% -2.79% 1.03% -2.53%

Hedge Funds

(HFRX Global)0.29% -0.33% 0.21% 0.53% 0.33% -0.09% -0.05% -0.39% 0.59% -0.46%

60/40* 0.54% -0.78% 0.65% 0.78% 0.64% -0.56% 0.60% -0.58% 1.51% -1.96%

48/32/20

(w/Alts.)**0.49% -0.69% 0.56% 0.73% 0.58% -0.47% 0.47% -0.54% 1.33% -1.66%

Source: Bloomberg; *60/40 portfolio = 30% Large Cap/10% Small Cap/15% EAFE/5% Emerging Markets/35% BarCap Agg./5% High Yield.

**48/32/20 portfolio = 24% Large Cap/8% Small Cap/12% EAFE/4% Emerging Markets/28% BarCap Agg./4% High Yield/20% HFRX Global Index.

WEEKLY ASSET CLASS PERFORMANCE (Prior 10 weeks ending Thursday)

Alternatives

Asset Allocation

Domestic

Equity

Int'l.

Equity

Fixed Income

Commodities

Equity

Large Cap

Core

Large Cap

Growth

Large Cap

Value

Mid Cap

Core

Mid Cap

Growth

Mid Cap

Value

Small Cap

Core

Small Cap

Growth

Small Cap

Value

Int'l.

Developed

Emerging

Markets REITs Comm. Int. Bond High Yield

Large Cap Core 1.00 1.01 0.99 1.02 1.02 1.02 1.11 1.11 1.12 1.03 1.33 0.84 1.35 0.90 0.98

Large Cap Growth 0.99 1.00 0.99 1.01 1.01 1.01 1.10 1.10 1.11 1.03 1.32 0.84 1.34 0.89 0.97

Large Cap Value 1.01 1.01 1.00 1.03 1.02 1.03 1.12 1.11 1.13 1.04 1.34 0.85 1.36 0.90 0.98

Mid Cap Core 0.98 0.99 0.98 1.00 1.00 1.00 1.09 1.09 1.10 1.02 1.31 0.83 1.32 0.88 0.96

Mid Cap Growth 0.98 0.99 0.98 1.00 1.00 1.00 1.09 1.09 1.10 1.02 1.31 0.83 1.33 0.88 0.96

Mid Cap Value 0.98 0.99 0.97 1.00 1.00 1.00 1.09 1.08 1.10 1.01 1.31 0.83 1.32 0.88 0.96

Small Cap Core 0.90 0.91 0.89 0.92 0.91 0.92 1.00 0.99 1.01 0.93 1.20 0.76 1.21 0.81 0.88

Small Cap Growth 0.90 0.91 0.90 0.92 0.92 0.92 1.01 1.00 1.01 0.94 1.21 0.76 1.22 0.81 0.88

Small Cap Value 0.89 0.90 0.89 0.91 0.91 0.91 0.99 0.99 1.00 0.92 1.19 0.75 1.20 0.80 0.87

Int'l. Developed 0.97 0.97 0.96 0.99 0.98 0.99 1.08 1.07 1.09 1.00 1.29 0.82 1.30 0.87 0.94

Emerging Markets 0.75 0.76 0.75 0.76 0.76 0.77 0.84 0.83 0.84 0.78 1.00 0.63 1.01 0.67 0.73

REITs 1.18 1.19 1.18 1.21 1.20 1.21 1.32 1.31 1.33 1.22 1.58 1.00 1.60 1.06 1.16

Commodities 0.74 0.75 0.74 0.76 0.75 0.76 0.83 0.82 0.83 0.77 0.99 0.63 1.00 0.67 0.72

Int. Bond 1.11 1.12 1.11 1.13 1.13 1.14 1.24 1.23 1.25 1.15 1.48 0.94 1.50 1.00 1.09

High Yield 1.03 1.03 1.02 1.04 1.04 1.05 1.14 1.13 1.15 1.06 1.37 0.87 1.38 0.92 1.00

RELATIVE STRENGTH MATRIX (BASED ON 30-DAY RSI)


14 FOR FINANCIAL ADVISOR USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC.

INDEX OVERVIEW The S&P 500 Index is an unmanaged index comprised of 500 widely held securities considered to be representative of the stock market in general. The S&P/Case-Shiller Home Price Indices measure the residential housing market, tracking changes in the value of the residential real estate market in 20 metropolitan regions across the United States. The MSCI EAFE Index represents 21 developed markets outside of North America. The MSCI EAFE Growth Index is an unmanaged index considered representative of growth stocks of Europe, Australasia and the Far East. The MSCI EAFE Value Index is an unmanaged index considered representative of value stocks of Europe, Australasia and the Far East. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The MSCI Europe Index is an unmanaged index considered representative of stocks of developed European countries. The Barclays US Credit Index is an unmanaged index considered representative of publicly issued, SEC-registered US corporate and specified foreign debentures and secured notes. The Barclays US Aggregate Bond Index is a market capitalization-weighted index of investment-grade, fixed-rate debt issues, including government, corporate, asset-backed, and mortgage-backed securities, with maturities of at least one year. The Barclays US Corporate High Yield Index covers the USD-denominated, non-investment grade, fixed-rate, taxable corporate bond market. Securities are classified as high-yield if the middle rating of Moody’s, Fitch and S&P is Ba1/BB+/BB+ or below. The index may include emerging market debt. The Barclays Capital Municipal Bond Index is an unmanaged index comprised of investment-grade, fixed-rate municipal securities representative of the tax-exempt bond market in general. The Barclays US Treasury Total Return Index is an unmanaged index of public obligations of the US Treasury with a remaining maturity of one year or more. The Citigroup World Government Bond Index is a market capitalization weighted bond index consisting of the government bond markets of Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, Malaysia, Mexico, the Netherlands, Norway, Poland, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom and the United States. The DJ-UBS Commodity Index Total ReturnSM measures the collateralized returns from a basket of 19 commodity futures contracts representing the energy, precious metals, industrial metals, grains, softs and livestock sectors. The Russell 1000 Index is a market capitalization-weighted benchmark index made up of the 1000 largest U.S. companies in the Russell 3000 Index. The Russell 1000 Growth Index is an unmanaged index considered representative of large-cap growth stocks. The Russell 1000 Value Index is an unmanaged index considered representative of large-cap value stocks. The Russell 2000 Index is an unmanaged index considered representative of small-cap stocks. The Russell 2000 Growth Index is an unmanaged index considered representative of small-cap growth stocks. The Russell 2000 Growth Index is an unmanaged index considered representative of small-cap value stocks. The Russell 3000 Index is an unmanaged index considered representative of the US stock market. The Russell Midcap Index is a subset of the Russell 1000 Index. It includes approximately 800 of the smallest securities based on a combination of their market cap and current index membership. The Russell Midcap Growth Index is an unmanaged index considered representative of mid-cap growth stocks. The Russell Midcap Value Index is an unmanaged index considered representative of mid-cap value stocks. The HFRX Indices are a series of benchmarks of hedge fund industry performance which are engineered to achieve representative performance of a larger universe of hedge fund strategies. Hedge Fund Research, Inc. employs the HFRX Methodology (UCITS compliant), a proprietary and highly quantitative process by which hedge funds are selected as constituents for the HFRX Indices. The Consumer Price Index (CPI) measures the change in the cost of a fixed basket of products and services. The Gross Domestic Product (GDP) rate is a measurement of the output of goods and services produced by labor and property located in the United States. The information, analysis, and opinions expressed herein are for general and educational purposes only. Nothing contained in this weekly review is intended to constitute legal, tax, accounting, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. All investments carry a certain risk, and there is no assurance that an investment will provide positive performance over any period of time. An investor may experience loss of principal. Investment decisions should always be made based on the investor’s specific financial needs and objectives, goals, time horizon, and risk tolerance. The asset classes and/or investment strategies described may not be suitable for all investors and investors should consult with an investment advisor to determine the appropriate investment strategy. Past performance is not indicative of future results. Information obtained from third party sources are believed to be reliable but not guaranteed. Endowment Wealth Management makes no representation regarding the accuracy or completeness of information provided herein. All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice. Investments in smaller companies carry greater risk than is customarily associated with larger companies for various reasons such as volatility of earnings and prospects, higher failure rates, and limited markets, product lines or financial resources. Investing overseas involves special risks, including the volatility of currency exchange rates and, in some cases, limited geographic focus, political and economic instability, and relatively illiquid markets. Income (bond) securities are subject to interest rate risk, which is the risk that debt securities in a portfolio will decline in value because of increases in market interest rates. Exchange Traded Funds (ETFs) are subject to risks similar to those of stocks, such as market risk. Investing in ETFs may bear indirect fees and expenses charged by ETFs in addition to its direct fees and expenses, as well as indirectly bearing the principal risks of those ETFs. ETFs may trade at a discount to their net asset value and are subject to the market fluctuations of their underlying investments. Investing in commodities can be volatile and can suffer from periods of prolonged decline in value and may not be suitable for all investors. Index Performance is presented for illustrative purposes only and does not represent the performance of any specific investment product or portfolio. An investment cannot be made directly into an index.


15

Alternative Investments may have complex terms and features that are not easily understood and are not suitable for all investors. You should conduct your own due diligence to ensure you understand the features of the product before investing. Alternative investment strategies may employ a variety of hedging techniques and non-traditional instruments such as inverse and leveraged products. Certain hedging techniques include matched combinations that neutralize or offset individual risks such as merger arbitrage, long/short equity, convertible bond arbitrage and fixed-income arbitrage. Leveraged products are those that employ financial derivatives and debt to try to achieve a multiple (for example two or three times) of the return or inverse return of a stated index or benchmark over the course of a single day. Inverse products utilize short selling, derivatives trading, and other leveraged investment techniques, such as futures trading to achieve their objectives, mainly to track the inverse of their benchmarks. As with all investments, there is no assurance that any investment strategies will achieve their objectives or protect against losses. Neither Endowment Wealth Management nor its representatives render tax, accounting or legal advice. Any tax statements contained herein are not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state, or local tax penalties. Taxpayers should always seek advice based on their own particular circumstances from an independent tax advisor. Copyright Endowment Wealth Management, Inc. All rights reserved

ABOUT Endowment Wealth Management, Inc. We are a Multi-Client Family Office whose sole mission is to provide wealth sustainability for individuals, families, retirement plans and institutions through the utilization of the Endowment Investment Philosophy. We manage our client’s financial wealth to enhance the human capital of their future generations. We work closely with our clients to develop an integrated long-term wealth plan that maximizes the benefit gained by integrating all of our individuals or families wealth producing assets. We are different from many other firms, in the way we build our portfolios on behalf of our clients.

For more information on Endowment Wealth Management, Inc., please visit www.EndowmentWM.com.

weekly market review weekly review · 2018-07-09 · weekly market review talking points • among...

Documents