Warning: Use of undefined constant user_level - assumed 'user_level' (this will throw an Error in a future version of PHP) in /nfs/c04/h03/mnt/164519/domains/cleatlindsey.com/html/wp-content/plugins/ultimate-google-analytics/ultimate_ga.php on line 524

Lindsey Report July 2015


Warning: Use of undefined constant user_level - assumed 'user_level' (this will throw an Error in a future version of PHP) in /nfs/c04/h03/mnt/164519/domains/cleatlindsey.com/html/wp-content/plugins/ultimate-google-analytics/ultimate_ga.php on line 524

It is hard to believe that we are at the halfway point in 2015. As for the equities, the S&P 500 is barely positive for the year and the Dow Jones Industrial is down about 2% on the year: both indexes were down in June a little more than 2%. The tech heavy Nasdaq is up 5% YTD, but also slid in June, falling 1.6% (AP).

Fixed-income investors seeking diversity or income through bonds have not had much to cheer about either. According to Barclays, treasury debt overall was .05%; however, since the end of March, the return has been -1.56%. The 10-year treasury yield has been steadily climbing since the end of March and has risen from 1.9% to 2.4% (Reuters). However, when yields are climbing, that means prices (values) are falling.

Barclays noted that investment-grade corporate debt was the biggest fixed-income loser in the second quarter with a negative return of 3.22%. Worldwide, Bloomberg Business noted that the global bond market gained 1.9% in Q1, but lost “an unprecedented 2.2%” in Q2.

Interestingly, both equities and fixed-income have been driven down by the same primary forces: the improving U.S. economy and our old friend: Greek debt problems. The improving U.S. economy is still a good thing; however, it may likely lead to the Federal Reserve raising rates. Typically, this would cause the value of existing bond holdings to fall. In addition, higher yields can cause equities to look relatively less attractive, so monies flow out of stocks and in to bonds.

On the other hand, the Greek problem is not a good outcome. As I’ve written many times in the past, the markets do not like uncertainty and the Greek debt crisis is one big uncertainty. On Monday 6/29, the Dow fell 350 points largely due to speculation that Greece would default on its debt. Even though this outcome would have minimal direct impact on our economy, it would directly impact the European Union and they are one of our largest trading partners.

Given the uncertainty surrounding The Fed and Greece, I’m expecting a volatile summer.

 

The opinions voiced are for informational purposes only and are not intended to provide specific advice to any individual. To determine which investments are appropriate for you, consult myself prior to investing. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. The economic forecasts set forth in this commentary may not develop as predicted and there can be no guarantees that strategies promoted will be successful.

Share This Post

Related Articles

Leave a Reply

© 2020 Cleat Lindsey. All rights reserved. Site Admin · Entries RSS · Comments RSS
Powered by WordPress · Designed by Theme Junkie

Warning: Use of undefined constant user_level - assumed 'user_level' (this will throw an Error in a future version of PHP) in /nfs/c04/h03/mnt/164519/domains/cleatlindsey.com/html/wp-content/plugins/ultimate-google-analytics/ultimate_ga.php on line 524

Warning: Use of undefined constant user_level - assumed 'user_level' (this will throw an Error in a future version of PHP) in /nfs/c04/h03/mnt/164519/domains/cleatlindsey.com/html/wp-content/plugins/ultimate-google-analytics/ultimate_ga.php on line 524