All the news you need to stay informed about what’s currently driving the market – courtesy of Raffa Wealth Management, LLC.
World markets sold off over the week with no asset class safe as the Fed announced it will potentially begin to wind down its support for the US economy and weakness seen in China spooking investors. The S&P 500 fell 2.1% and the Dow dropped 1.8%. Internationally Europe dropped 3.7%, but Japan rose 4.3%. Emerging markets were down 4.7%, its largest weekly drop since May 2012. Treasury yields rose to their highest levels since 2011 with the 10 year treasury closing the week at 2.514% up 0.39% for the week. Article
At the conclusion of their policy meeting the Fed announced it was not making any changes for the time being, but would likely look to begin winding down the bond purchase program later this year. The Fed believes the US economy is strengthening with unemployment expectations of between 6.5% and 6.8% by the end of 2014, GDP expected to pick up this year and inflation expectations below their target of 2%. They do not expect to begin raising interest rates until 2015 at the earliest. Article
Concerns grew over China’s growth prospects as a report on manufacturing health fell to a nine month low in June. Investment banks have cut their growth estimates for China for 2013 from the 8% range to closer to 7.5%. Article
Home builders’ sentiment jumped in June for the highest increase since 2002, far outpacing expectations. Existing home sales rose 4.2% in May over April and are up 12.9% over the past year. The sales pace reached its highest level since the spring of 2009.
The CPI for May rose only 0.1%, while removing food and energy inflation gained 0.2%. Over the past year both indexes are below 2% and do not show inflation as much of a problem. Article
The Europe purchasing managers index rose to a 15 month high in June signaling improving economic conditions, but growth will likely remain too meager to significantly combat the area’s problems.
Raffa Wealth Management is an independent investment advisor providing nonprofit organizations, high net-worth investors, and qualified retirement plans with a full range of investment consulting services. We were established to fill the need for transparency, clarity, and vision in the professional management of investment assets. Visit us at www.raffawealth.com