WEEKLY CAPITAL MARKET HIGHLIGHTS:
- Among equities, large cap outperformed small cap. Returns were split fairly evenly across growth and value stocks. International stocks traded mostly in line with domestic equities, while emerging market equities trailed their developed peers. The Dow Jones Industrial Average (DJIA) rose above 21,000 on Wednesday, taking only 24 trading days of setting record highs from the previous 1,000 point level of 20,000, a key psychological level, which was eclipsed on January 25. Earlier in the week, the DJIA broke its streak on Tuesday of 12 straight days of reaching record high closes. This was the longest streak of record high closes since 1987.
- Commodities traded lower, as gold prices declined.
- The yield on the 10-year Treasury Note spiked following President Trump’s speech, which highlighted infrastructure spending plans that may lead to inflationary concerns and higher interest rates. The federal funds rate hike odds surged to a 94% likelihood of a 25bps increase at the March meeting, following a speech from Fed Chair Janet Yellen on Friday, which hinted at the move, and President Trump’s speech to Congress on Tuesday. This reading is up from a 50% likelihood earlier in the week.
- The dollar index posted gains, as the yen and pound weakened, amid increased expectations that the Federal Reserve (Fed) may tighten at its upcoming meeting.
- Among major economic data released, GDP for the US economy was reported at 1.9% growth for the second estimate, driven by a 3% increase in personal consumption. Initial jobless claims dropped by more than expected to 223,000 for the prior week. Pending home sales fell by 2.8% in January. Personal income rose by 0.4% in January, beating expectations, while personal spending was reported at +0.2%, slightly below expectations.
Click here to download the complete weekly report: Endowment Wealth Management Weekly Review March 3, 2017