#bondmarket

Risk assets continued to rally, benefiting from increased confidence of a ‘soft landing’, decent corporate earnings, and bullish investor sentiment. Here are 3 things you need to know:

1. The S&P 500 gained 19.5% through July for its best performance since 1997 and the Nasdaq surged 37.1% for its best showing since 1975. Both indexes have posted gains for five consecutive months.
2. In July, the Dow Jones Industrial Average (DJIA) achieved its longest winning streak since 1987, posting gains in 13 consecutive sessions.
3. We saw the best month for oil since January 2022 with WTI +15.8% higher as tight supply and hopes of stronger demand squeezed the market.

Sources: J.P. Morgan Asset Management – Economic Update; Bureau of Economic Analysis (www.bea.gov); Bureau of Labor Statistics (www.bls.gov); Federal Open Market Committee (www.federalreserve.gov); Bloomberg; FactSet.

Indices:

• The Bloomberg Barclays Aggregate Bond Index is a broad-based index used as a proxy for the U.S. bond market. Total return quoted.
• The S&P 500 is designed to be a leading indicator of U.S. equities and is commonly used as a proxy for the U.S. stock market. Price return quoted.
• The MSCI ACWI ex-US Index captures large and mid-cap representation across 22 of 23 developed market countries (excluding the U.S.) and 27 emerging market countries.  The index covers approximately 85% of the global equity opportunity set outside the U.S. Price return quoted.
• The MSCI Emerging Markets Index captures large and mid-cap segments in 26 emerging markets. Price return quoted (USD).

Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s website or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy (including those undertaken or recommended by Company), will be profitable or equal any historical performance level(s). Please see important disclosure information here.

Out of nowhere, equities entered a bull market on June 8^th after exiting a 248-trading-day bear market (its longest since 1948). Here are 3 things you need to know:

1. The Nasdaq Composite surged 32% through the end of June, its best first-half performance in 40 years, far outpacing the Dow Jones Industrial Average, which gained 4%, and the S&P 500, which rose 4.5%.
2. Three-month U.S. Treasury bill yields hit 22-year highs near 5.60% in June.
3. The two-year U.S. Treasury yield pushed above 4.90%, pulling the U.S. yield curve near its most inverted level since the early 1980s. 

Sources: J.P. Morgan Asset Management – Economic Update; Bureau of Economic Analysis (www.bea.gov); Bureau of Labor Statistics (www.bls.gov); Federal Open Market Committee (www.federalreserve.gov); Bloomberg; FactSet.

Indices:

• The Bloomberg Barclays Aggregate Bond Index is a broad-based index used as a proxy for the U.S. bond market. Total return quoted.
• The S&P 500 is designed to be a leading indicator of U.S. equities and is commonly used as a proxy for the U.S. stock market. Price return quoted.
• The MSCI ACWI ex-US Index captures large and mid-cap representation across 22 of 23 developed market countries (excluding the U.S.) and 27 emerging market countries.  The index covers approximately 85% of the global equity opportunity set outside the U.S. Price return quoted.
• The MSCI Emerging Markets Index captures large and mid-cap segments in 26 emerging markets. Price return quoted (USD).

Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s website or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy (including those undertaken or recommended by Company), will be profitable or equal any historical performance level(s). Please see important disclosure information here.

Wall Street closed out a winning April after more companies said their profits at the start of the year weren’t as bad as expected. Here are 3 things you need to know:

1. US real GDP rose 1.1% annualized in the first quarter, 0.8% below consensus expectations. While below expectations on the surface, a deeper look reveals a degree of underlying resiliency. Much of the slowdown can be attributed to an inventory drag, with consumption accelerating 3.7% quarter-over-quarter.
2. The March core PCE price index (the Fed’s preferred measure of inflation) fell modestly from 4.7% year-over-year in February to 4.6% year-over-year in March. Inflation is moderating, but slowly.
3. For Q1 2023 earnings, 267 issues have been reported, with 205 (76.8%) of them beating on earnings and 192 of 265 (72.5%) beating on sales (as of 4/30/23). (Source: S&P Global)

Sources: J.P. Morgan Asset Management – Economic Update; Bureau of Economic Analysis (www.bea.gov); Bureau of Labor Statistics (www.bls.gov); Federal Open Market Committee (www.federalreserve.gov); Bloomberg; FactSet.

Indices:

• The Bloomberg Barclays Aggregate Bond Index is a broad-based index used as a proxy for the U.S. bond market. Total return quoted.
• The S&P 500 is designed to be a leading indicator of U.S. equities and is commonly used as a proxy for the U.S. stock market. Price return quoted.
• The MSCI ACWI ex-US Index captures large and mid-cap representation across 22 of 23 developed market countries (excluding the U.S.) and 27 emerging market countries.  The index covers approximately 85% of the global equity opportunity set outside the U.S. Price return quoted.
• The MSCI Emerging Markets Index captures large and mid-cap segments in 26 emerging markets. Price return quoted (USD).

Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s website or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy (including those undertaken or recommended by Company), will be profitable or equal any historical performance level(s). Please see important disclosure information here.

Despite the banking-sector turmoil seen in March, the S&P 500 rose in March, helped by strong returns from growth stocks that were buoyed by falling bond yields. Here are 3 things you need to know:

1. The Federal Reserve continued to hike interest rates by 25 bps in March bringing the Federal funds rate range to 4.75% to 5.00%. U.S. Fed Chair Jerome Powell admitted, the current bank stress will tighten credit, with the result being “the equivalent of a rate hike or perhaps more than that.”
2. Technology led the advance, with the Nasdaq Composite ending up 6.69% in March and 16.77% in the quarter, its best showing since 2020’s second three months. 
3. In the Financial sector of the S&P 500, 14 of the 65 stocks were up and 51 were down, with two regional issues going into receivership (SVB Financials and Signature Bank), as one regional declined 89% for the month (First Republic Bank). Banking issues, at this point in time, do not appear to be systemic, but withdrawals may lead to more failures.

Sources: J.P. Morgan Asset Management – Economic Update; Bureau of Economic Analysis (www.bea.gov); Bureau of Labor Statistics (www.bls.gov); Federal Open Market Committee (www.federalreserve.gov); Bloomberg; FactSet.

Indices:

• The Bloomberg Barclays Aggregate Bond Index is a broad-based index used as a proxy for the U.S. bond market. Total return quoted.
• The S&P 500 is designed to be a leading indicator of U.S. equities and is commonly used as a proxy for the U.S. stock market. Price return quoted.
• The MSCI ACWI ex-US Index captures large and mid-cap representation across 22 of 23 developed market countries (excluding the U.S.) and 27 emerging market countries.  The index covers approximately 85% of the global equity opportunity set outside the U.S. Price return quoted.
• The MSCI Emerging Markets Index captures large and mid-cap segments in 26 emerging markets. Price return quoted (USD).

Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s website or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy (including those undertaken or recommended by Company), will be profitable or equal any historical performance level(s). Please see important disclosure information here.

Overall, January continued the strong bounce back seen for most global assets since October even if the performance seen in the first half of the month wasn’t quite matched in the second half. It was still the best January in several years for many assets. Here are 3 things you need to know:

1. Q4 2022 Gross Domestic Product (GDP) came in above expectations at 2.9%. The increase primarily reflected increases in inventory investment and consumer spending. Real GDP increased 2.1% in 2022.
2. U.S. inflation data released in January showed the rates of headline and core Consumer Price Index (CPI) slowed in December to 6.5% and 5.7%, respectively.
3. The following are selected examples of it being the best January since the year in brackets: US Investment Grade Corp Bond Index (1975), European Banks (best January since index started in 1987), the Italian FTSE MIB Index (1998), NASDAQ (2001), Copper (2003), the Shanghai Comp Index (2009), the Hong Kong Hang Seng Index (2012), the Euro High Yield Index (2012), the Stoxx Europe 600 stock index (2015), US Treasuries (2015), Gold (2015), and the Germany DAX stock index (2015). (Source: Deutsche Bank, Bloomberg Finance LP)

Sources:

Sources: J.P. Morgan Asset Management – Economic Update; Bureau of Economic Analysis (www.bea.gov); Bureau of Labor Statistics (www.bls.gov); Federal Open Market Committee (www.federalreserve.gov); Bloomberg; FactSet.

Indices:

• The Bloomberg Barclays Aggregate Bond Index is a broad-based index used as a proxy for the U.S. bond market. Total return quoted.
• The S&P 500 is designed to be a leading indicator of U.S. equities and is commonly used as a proxy for the U.S. stock market. Price return quoted.
• The MSCI ACWI ex-US Index captures large and mid-cap representation across 22 of 23 developed market countries (excluding the U.S.) and 27 emerging market countries.  The index covers approximately 85% of the global equity opportunity set outside the U.S. Price return quoted.
• The MSCI Emerging Markets Index captures large and mid-cap segments in 26 emerging markets. Price return quoted (USD).

Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s website or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy (including those undertaken or recommended by Company), will be profitable or equal any historical performance level(s). Please see important disclosure information here.