Market Dashboard

Last update: 2/19/2019

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10 YR. T-NOTE

Last week's featured headlines and data

Domestic

  • For the week ending February 15, the S&P 500® index rose 2.50% to 2,707.88; the S&P 500 TR rose 2.56%. The S&P 500 TR’s total return year to date, including price change plus dividends, was 11.02%. The Dow Jones Industrial Average (Total Return) rose 3.21%.
  • US equities rallied for the third consecutive week on strong corporate earnings and optimism surrounding a potential US-China trade deal. The week’s strong performance came despite data from December showing weak holiday retail spending.
  • Energy stocks and industrials led last week’s rally, maintaining their market leadership for the year. Conversely, utilities and real estate lagged.
  • Congressional leaders agreed to a compromise on border security aimed at avoiding another government shutdown. The plan allocates $1.37 billion for 55 miles of border fencing and a cap on the number of detention beds for illegal immigrants. After signing the bill, President Trump declared a “national emergency” in an attempt to secure funding for his proposed border wall without the need for appropriations from Congress.
S&P 500 sector performance for the week

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Russell Style Indexes

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International

  • The US continues to focus its ire on China telecom company Huawei Technologies. After accusing the company of violating US sanctions on Iran, Secretary of State Mike Pompeo warned that countries buying equipment from Huawei could jeopardize their partnerships with the US.
  • A US delegation arrived in Beijing to work out the framework for a potential US-China trade accord. Talks reconvene this week in Washington, DC.
  • Iraq continues to defy US sanctions that ban purchases of Iranian natural gas and electricity. In addition, China and India continue to buy Iranian oil, while Britain, France, and Germany have created a mechanism for doing business with Iran without technically violating sanctions. Vice President Mike Pence last week criticized the long-time European allies for the arrangement.
  • British Prime Minister Theresa May failed to extract changes from the European Union on the so-called “backstop,” which leaves the border between Ireland and Northern Ireland open even if there’s no final Brexit deal. Pro-Brexit groups fear the backstop will force the UK to stay in the EU.
  • UK gross domestic product increased a smaller-than-forecast 0.2% in the fourth quarter of 2018, while December GDP actually shrank by 0.4%. Economists believe there’s a 30% percent chance the UK could fall into recession over the next 12 months.
  • Spain’s Prime Minister Pedro Sanchez called a snap election after parliament failed to back his government’s budget. The election is scheduled for April 28 and will be the country’s third in four years.
  • Indian markets sold off after Prime Minister Narendra Modi said his country will give a “befitting reply” to Thursday’s assault that killed 37 paramilitary personnel and injured several others in the Indian controlled Kashmir. A Pakistan-based terror group claimed responsibility for the attack.
Trailing index returns

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Fixed income

  • Hopes for successful trade negotiations between the US and China shifted investor sentiment towards riskier assets, causing Treasury yields to rise. The yield on the 10-year Treasury note settled the week at 2.66%.
  • Declining mortgage rates are sparking investor (not homeowner) demand from floating-rate debt to fixed-rate debt.
  • The yield on the 5-year Treasury note fell below the yield on the one-year Treasury bill—a potential indication that the Fed could begin cutting interest rates within the next few years.
  • Chinese bond markets are undergoing a flight to quality, with investors favoring top-rated corporate debt and sovereign bonds. This is the opposite of Chinese authorities’ efforts to direct investors to smaller-company debt. The yield spread between high-quality bonds and high-yield issues is the widest it has been in seven years.
Weekly fixed income rates

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Other news

  • Amazon.com pulled out of its plan to build a massive complex in Long Island City, Queens. The decision came after months of withering criticism from New York City activists who questioned giving city subsidies to one of the world’s largest corporations.
  • The Wall Street Journal reported that founders of rideshare company Lyft plan to create a class of supervoting shares that will ensure the control of top directors.
  • A federal judge pulled a plea deal from former Trump Campaign Chairman Paul Manafort after ruling that he had lied about conversations with a Russian intelligence operative. Manafort could spend the rest of his life in jail.
  • Airbus has decided to halt production of the A380, the world’s largest passenger aircraft. Despite a much-ballyhooed rollout in 2005, many airlines have opted for smaller, more fuel-efficient aircraft. Production of the jumbo jet will end by 2021.

 

The week ahead

  • US and Canadian financial markets were closed in observance of Presidents Day and Family Day, respectively.
  • ­The Consumer Analyst Group of New York conference kicked off in Boca Raton, Fla.
  • The Housing Market Index for February is reported.
  • Federal Reserve Bank of Cleveland President Loretta Mester is the keynote speaker at the Lyons Economic Forecast event at the University of Delaware.
  • Walmart and others report quarterly earnings.
  • The FOMC releases the minutes from its January 29–30 policy meeting.
  • Redbook is released.
  • ­E-commerce retail sales are reported.
  • ­MBA mortgage applications are reported.
  • ­Agilent Technologies and others report quarterly earnings.  
  • The Census Bureau releases its advance report on durable goods.
  • ­The Leading Economic Index for January is reported.
  • ­The Manufacturing Purchasing Managers’ Index for February is released.
  • ­The National Association of Realtors reports existing-home sales data for January.
  • ­The EIA Natural Gas Storage Report is released.
  • ­The EIA Petroleum Status Report is released.
  • ­Jobless claims are reported.
  • ­Domino’s Pizza and others report quarterly earnings.
  • The University of Chicago hosts its annual US Monetary Policy Forum. Federal Reserve Bank of St. Louis President James Bullard will participate in a panel discussion on the future of the Fed’s balance sheet.
  • ­The Baker Hughes Rig Count is reported.
  • ­Cinemark Holdings and others report quarterly earnings.

 

 

 

Index benchmarks

Weekly and monthly style performance charts use Russell 1000, Russell Mid Cap, and Russell 2000 style indexes to represent large cap, mid cap, and small cap respectively.

BarCap Municipal TR USD: Listed for municipal-bond funds. This index serves as a benchmark for long-term, investment-grade, tax-exempt municipal bonds. The returns we publish for the index are total returns, which include reinvestment of dividends.

BarCap US Agg Bond TR USD: Composed of the BarCap Government/Credit Index, the Mortgage-Backed Securities Index, and the Asset-Backed Securities Index. The returns we publish for the index are total returns, which include reinvestment of dividends.

Barclays Capital U.S. Corporate High-Yield Bond Index: The U.S. Corporate High-Yield Index covers the USD-denominated, non-investment grade, fixed-rate, taxable corporate bond market. Securities are classified as high-yield if the middle rating of Moody’s, Fitch, and S&P is Ba1/BB+/BB+ or below. The index excludes emerging markets debt. The index was created in 1986, with index history backfilled to January 1, 1983. The U.S. Corporate High-Yield Index is part of the U.S. Universal and Global High-Yield Indexes.

Barclays Capital U.S. 7–10 Year Treasury: The index measures the performance of U.S. Treasury securities that have a remaining maturity of at least seven years and less than 10 years.

Bloomberg Gold Subindex: Formerly known as Dow Jones-UBS Gold Subindex (DJUBSGC), the index is a commodity group subindex of the Bloomberg CI composed of futures contracts on Gold. It reflects the return of underlying commodity futures price movements only and is quoted in USD.

Bloomberg WTI Crude Oil Subindex: Formerly known as Dow Jones-UBS WTI Crude Oil Subindex Total Return (DJUBCLTR), the index is a single commodity subindex of the Bloomberg CI composed of futures contracts on crude oil. It reflects the return of underlying commodity futures price movements only and is quoted in USD. 

Citigroup World Government Bond Index (Citigroup WGBI) is a market capitalization weighted index consisting of the government bond markets. Country eligibility is determined based on market capitalization and investability criteria. All issues have a remaining maturity of at least one year.

Dow Jones Industrial Average: Computed by summing the prices of the stocks of 30 companies and then dividing that total by an adjusted value—one which has been adjusted over the years to account for the effects of stock splits on the prices of the 30 companies. Dividends are reinvested to reflect the actual performance of the underlying securities.

DJ UBS Sub Crude Oil TR USD: Indexes in the DJ-UBSCIsm family are calculated on both an excess return and total return basis. The excess return indexes reflect the return of underlying commodity futures price movements only, whereas the total return indexes reflect the return on fully collateralized futures positions. 19 commodities are included in the DJ-UBSCIsm, representing the following commodity sectors: energy, precious metals, industrial metals, livestock, and agriculture.

DJ UBS Sub Gold TR USD: Indexes in the DJ-UBSCIsm family are calculated on both an excess return and total return basis. The excess return indexes reflect the return of underlying commodity futures price movements only, whereas the total return indexes reflect the return on fully collateralized futures positions. 19 commodities are included in the DJ-UBSCIsm, representing the following commodity sectors: energy, precious metals, industrial metals, livestock, and agriculture.

J.P.Morgan Emerging Markets Bond Index Global (EMBI Global) tracks total returns for traded external debt instruments in the emerging markets, and is an expanded version of the JPMorgan EMBI+. As with the EMBI+, the EMBI Global includes U.S.dollar-denominated Brady bonds, loans, and eurobonds with an outstanding face value of at least $500 million. It covers more of the eligible instruments than the EMBI+ by relaxing somewhat the strict EMBI+ limits on secondary market trading liquidity.

MSCI EAFE (Europe, Australasia, Far East) Index: A free float-adjusted market-capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. The MSCI EAFE Index consists of the following 21 developed market country indexes: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom. For more information, visit the MSCI website.

MSCI EMF (Emerging Markets Free) Index: A free float-adjusted market-capitalization index that is designed to measure equity market performance of emerging markets. The MSCI Emerging Markets Index consists of the following 23 emerging market country indexes: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates. For more information, visit the MSCI web site.

Russell 1000: Consists of the 1000 largest companies within the Russell 3000 index. Also known as the Market-Oriented Index, because it represents the group of stocks from which most active money managers choose. The returns we publish for the index are total returns, which include reinvestment of dividends. Frank Russell Company reports its indexes as one-month total returns.

Russell 1000 Growth: Market-capitalization weighted index of those firms in the Russell 1000 with higher price-to-book ratios and higher forecasted growth values. The Russell 1000 includes the largest 1000 firms in the Russell 3000, which represents approximately 98% of the investable US equity market.

Russell 1000 Value: Market-capitalization weighted index of those firms in the Russell 1000 with lower price-to-book ratios and lower forecasted growth values. The Russell 1000 includes the largest 1000 firms in the Russell 3000, which represents approximately 98% of the investable US equity market.

Russell 2000: Consists of the smallest 2000 companies in the Russell 3000 Index, representing approximately 7% of the Russell 3000 total market capitalization. The returns we publish for the index are total returns, which include reinvestment of dividends.

Russell 2000 Growth: Market-weighted total return index that measures the performance of companies within the Russell 2000 Index having higher price-to-book ratios and higher forecasted growth values. The Russell 2000 Index includes the 2000 firms from the Russell 3000 Index with the smallest market capitalizations. The Russell 3000 Index represents 98% of the of the investable US equity market.

Russell 2000 Value: Market-weighted total return index that measures the performance of companies within the Russell 2000 Index having lower price-to-book ratios and lower forecasted growth values. The Russell 2000 Index includes the 2000 firms from the Russell 3000 Index with the smallest market capitalizations. The Russell 3000 Index represents 98% of the of the investable US equity market.

Russell Midcap: Measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 25% of the total market capitalization of the Russell 1000 Index. As of the latest reconstitution, the average market capitalization was approximately $4.0 billion; the median market capitalization was approximately $2.9 billion. The largest company in the index had an approximate market capitalization of $12 billion.

Russell Midcap Growth: Market-weighted total return index that measures the performance of companies within the Russell Midcap Index having higher price-to-book ratios and higher forecasted growth values. The Russell Midcap Index includes firms 201 through 1000, based on market capitalization, from the Russell 3000 Index. The Russell 3000 Index represents 98% of the of the investable U.S. equity market.

Russell Midcap Value: Market-weighted total return index that measures the performance of companies within the Russell Midcap Index having lower price-to-book ratios and lower forecasted growth values. The Russell Midcap Index includes firms 201 through 1000, based on market capitalization, from the Russell 3000 Index. The Russell 3000 Index represents 98% of the of the investable U.S. equity market.

NASDAQ: Measures the performance of all issues listed in the NASDAQ Stock Market, except for rights, warrants, units, and convertible debentures. Morningstar reports the NASDAQ Composite as a price return.

S&P 500: A market capitalization-weighted index of 500 widely held stocks often used as a proxy for the stock market. It measures the movement of the largest issues. Standard and Poor's chooses the member companies for the 500 based on market size, liquidity and industry group representation. Included are the stocks of industrial, financial, utility, and transportation companies. Since mid-1989, this composition has been more flexible and the number of issues in each sector has varied. The returns presented for the S&P 500 are total returns, including the reinvestment of dividends each month.

The S&P 500 Consumer Discretionary sector comprises those companies included in the S&P 500 that are classified as members of the consumer discretionary sector.

The S&P 500 Consumer Staples sector comprises those companies included in the S&P 500 that are classified as members of the consumer staples sector.

The S&P 500 Energy sector comprises those companies included in the S&P 500 that are classified as members of the energy sector.

The S&P 500 Financials sector comprises those companies included in the S&P 500 that are classified as members of the financial sector.

The S&P 500 Health Care sector comprises those companies included in the S&P 500 that are classified as members of the health care sector.

The S&P 500 Industrials Sector comprises those companies included in the S&P 500 that are classified as members of the industrials sector.

The S&P 500 Information Technology Sector comprises those companies included in the S&P 500 that are classified as members of the information technology sector.

The S&P 500 Materials Sector comprises those companies included in the S&P 500 that are classified as members of the materials sector.

The S&P 500 Telecommunications Services Sector comprises those companies included in the S&P 500 that are classified as members of the telecommunications services sector.

The S&P 500 Utilities Sector comprises those companies included in the S&P 500 that are classified as members of the utilities sector.