Best Weekly Gain in a MonthSubmitted by Guidant Planning on August 29th, 2017
August 28, 2017–U.S. stocks rebounded from two days of selling on Friday, but still recorded the strongest weekly performance in over a month. Friday’s rebound was sparked by comments within Fed Chair Janet Yellen’s Jackson Hole, Wyoming speech which were not as hawkish as many economists had expected. The euro reached a two and a half year high against the dollar in relief that European Central Bank President Mario Draghi did not decry the currency’s valuation in his Jackson Hole speech. Equities soared on Tuesday after President Trump’s top economic advisor, Gary Cohn, said he expects tax reform measures to pass this year and confirmed he has no plans to resign in protest over the president’s reactions to recent violence in Charlottesville, Virginia. Wall Street also kept an eye on Hurricane Harvey, which was expected to make landfall near Rockport, Texas on Friday night.
In other key economic data last week, seasonally-adjusted home prices climbed 1.6% during the second quarter this year, and a regional manufacturing activity index reading from the Richmond Federal Reserve bank topped projections for August (14 vs. 10 expected). New home sales sank 9.4% in July, with only the Midwest region posting an increase. Existing home sales fell 1.3% in July to an 11-month low, with persistently low inventory levels keeping used home sales essentially flat over the past year and a half. An early reading of durable goods orders fell 6.8% in July, but core orders excluding transportation-related goods climbed 0.5%, following a 0.1% June increase. The VIX Volatility Index retreated nearly 21% last week. The pullback reflected a large degree of investor relief from earlier fears of hawkish outlooks from attendees at the Kansas City Fed’s annual Jackson Hole Economic Policy Symposium.
For the week, the S&P 500 rose 0.75%, the Dow Industrials gained 0.64% and the NASDAQ Composite advanced 0.80%.Within the S&P 500,10 of the 11 major sector groups posted gains last week, led by Real Estate (+2.29%), Telecom (+1.98%) and Materials (+1.28%). Consumer Discretionary (+0.41%) rose the least, while Consumer Staples (-0.97%) lagged. U.S. crude oil prices pared prior week gains, falling 1.62% to end the week at $47.87/barrel, while gold futures edged 0.58% higher to close the week at $1,291.37/ounce. The U.S. Dollar Index retreated by 0.74% to 92.740. Treasury prices edged higher, sending the yield on 10-year Treasury notes down 2.8 basis points to 2.167%.Over the past three weeks the S&P 500 has narrowed its gap below its 2,481 August 7 all-time high to 1.5%.
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The Barclays U.S. Aggregate bond Index is an unmanaged index composed of Barclays Credit government bond index, mortgage backed securities index, and asset backed securities index and is generally representative of the US Bond market.
The Barclays U.S. Corporate High Yield Index measures the market of USD-denominated, non-investment grade, fixed-rate, taxable corporate bonds. Securities are classified as high yield if the middle rating of Moody's, Fitch, and S&P is Ba1/BB+/BB+ or below, excluding emerging market debt.
The Barclays U.S. Municipal Bond Index is an unmanaged, market-value-weighted index of investment-grade municipal bonds with maturities of one year or more.
The Bloomberg Commodity Index is a broadly diversified index that allows investors to track commodity futures through a single, simple measure. It is composed of futures contracts on physical commodities and is designed to minimize concentration in any one commodity or sector. It currently includes 19 commodity futures in five groups. No one commodity can comprise less than 2% or more than 15% of the index, and no group can represent more than 33% of the index (as of the annual reweightings of the components).
The CBOE Volatility Index (VIX) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. Since its introduction in 1993, VIX has been considered by many to be the world's premier barometer of investor sentiment and market volatility.
The Citigroup U.S. Economic Surprise Index is a weighted historical standard deviation measure of U.S. economic data surprises of actual data releases versus Bloomberg survey median levels. Calculated daily in a rolling three-month window, when the index is positive the reading suggests that economic releases have on balance [been] beating economists' consensus forecasts. The weights of economic indicators are derived from relative high-frequency spot foreign exchange impacts of 1 standard deviation data surprises. The indices also employ a time decay function to replicate the limited memory of markets.
The CRB Index is a pricing index that measures changes in the price of 22 commodities that are believed to be among the first to react to changes in economic conditions.
The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
The Dow Jones Industrial Average (DJIA) is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq.
The MSCI EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada.
MSCI Emerging Markets is designed to measure equity market performance in global emerging markets. It is a float-adjusted market capitalization index.
The NASDAQ 100 Index is a modified capitalization-weighted index of the 100 largest and most active non-financial domestic and international issues listed on the NASDAQ. No individual listing can have more than a 24% weighting. Launched on February 1, 1985, the index carried a base value of 125.
The NASDAQ Composite Index includes all domestic and international based common type stocks listed on The NASDAQ Stock Market. The NASDAQ Composite Index is a broad based index.
The Russell 1000 Index comprises the 1,000 largest companies in the U.S. equity market, and is a subset of the Russell 3000 Index. The Russell 1000 is a market capitalization-weighted index, meaning that the largest companies constitute the largest percentages in the index, affecting performance more than the smallest index members. The inception date for the Russell 1000 and 3000 indices was January 1, 1984.
The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
The S&P 500 is an index of 500 stocks chosen for market size, liquidity and industry grouping (among other factors) designed to be a leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large cap universe.
The S&P GSCI Gold Index, a sub-index of the S&P GSCI, provides investors with a reliable and publicly available benchmark tracking the COMEX gold future.
The S&P GSCI Crude Oil Index is a sub-index of the S&P GSCI and provides investors with a publicly available benchmark for investment performance in the crude oil market.
The U.S. Dollar Index is a weighted geometric mean that provides a value measure of the United States dollar relative to a basket of major foreign currencies. The index, often carrying a USDX or DXY moniker, started in March 1973, beginning with a value of the U.S. Dollar Index at 100.000. It has since reached a February 1985 high of 164.720, and has been as low as 70.698 in March 2008.
West Texas Intermediate (WTI) is a crude oil stream produced in Texas and southern Oklahoma which serves as a reference or "marker" for pricing a number of other crude streams. WTI is the underlying commodity of the New York Mercantile Exchange's oil futures contracts.
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