The S&P ended the week down 3.8% and at one point the intra-day low reached back to mid-June levels before recovering. The economic news of last week contained a clear acknowledgment by the Federal Reserves’ Open Market Committee that the economic recovery was not moving forward as they had anticipated and that its pace would be more modest over the near term. As a result, the Fed said it will purchase additional Treasuries in an attempt to provide a prod to the economy… most investors were underwhelmed by the action. Other economic news items included reports that the trade deficit expanded in June and Retail Sales came in somewhat below forecasts, only adding to a disappointing week.
The numbers for the week are as follows; the Dow Jones Industrial Average was off -3.29% closing at 10,303, the S&P 500 Index fell -3.83% to 1,079, Nasdaq Composite Index was lower by -5.03% finishing at 2,173 and the Russell 2000 (small cap index) lost 6.45% closing at 609.
We continue to hold that the U.S. economy is not moving into a “double-dip”, however, we feel there will be continued debate on both sides until more consistent and positive economic reports are posted. We believe that the economy is still in a recovery mode and only shifting speeds towards a more sustainable expansion. If the labor market can recover in the coming months, it will feed into a more consolidated consensus of economic traction.
Having a good plan is the key to navigating a calm or choppy economic environment; we would never advise leaving port without one. Please call us with questions or if we can help chart a course.
Securities and Financial Planning offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC
**Standard Compliance Disclosures
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly. Stock investing involves risk including loss of principal. The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries, and widely held by individuals and institutional investors. The Standard & Poor’s 500 Stock Index (S&P 500) is an unmanaged capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The NASDAQ Composite Index measures all domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index. The Russell 2000 Small Stock Index is an unmanaged index generall representative of the 2000 smallest companies in the Russell 3000 Index. The Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values.