- Equities faced selling pressure Thursday and Friday on news that President Trump will not meet with Chinese President Xi prior to the March 1 deadline. Markets appear to be in a holding period as investors await further news on a US/China trade deal, Brexit, and a bipartisan resolution to prevent another government shutdown.
- The yield on the 10-year U.S. Treasury Note increased to 2.73% on Tuesday before declining below 2.65% on Thursday and Friday.
- British Prime Minister Theresa May was in Brussels for meetings with other EU leaders to avoid a hard Brexit, which is 50 days out.
- Bill Gross announced his retirement this week. The investor once known as the “Bond King” co-founded PIMCO in 1971 and managed client assets for more than forty years, most recently at Janus.
- Among major economic data, initial jobless claims fell from a one-and-a-half -year high last week, decreasing by 19,000 to 234,000.
Click here to download the complete weekly report: EWMWeeklyReview02.11.2018
- Global equity markets rose broadly this week. US markets were led by the tech-heavy NASDAQ on the tailwinds of positive earnings from a number of FAANG companies. International stocks were largely higher; however, they trailed emerging markets, which posted strong returns for the week, with Brazil contributing significantly, while Greece and India detracted marginally.
- Treasury yields fell this week, primarily due to the Fed’s vowing “patience” in monetary policy. However, yields rose marginally on Friday morning, trimming the decline, after the December employment report showed stronger-than-expected US job gains and the yield on the 30-year U.S. Treasury bond rising back above 3%.
- Commodities rose, with the Bloomberg Commodity Index finishing slightly higher after an overall positive week. Within the index, oil prices jumped along with the stock market on Friday, after the US monthly job report showed a surge in employment. Oil futures also headed higher, as US sanctions on Venezuela’s stateowned oil firm, PDVSA, raised the risk of tighter crude supplies.
- The US dollar ended the week lower against a basket of major trade partners’ currencies. The Deutsche Bank Long US dollar index fell .73%, likely pressured by the Fed’s cautious US economic outlook, suggesting the central bank may be near the end of its tightening cycle.
- In other economic news, the US gained 304,000 new jobs in January, the biggest increase in almost a year and marking 100 consecutive months of employment gains. The unemployment rate, while still historically low, drifted marginally higher to 4.00%, likely a byproduct of the combination of a higher labor force participation rate and the government shutdown.
Click here to download the complete weekly report: EWMWeeklyReview02.04.2018
- Equity markets indices were generally down across the board. Domestic indices were not able to recoup Tuesday’s losses.
- Volatility persists in the market. Even though the CBOE Volatility Index (VIX) was down during the week, it remains above its historical average.
- Mortgage rates remained flat during the week, causing the stocks of home-building companies to rise.
- Commodity prices rose despite the decline in oil prices.
- Treasury yields ticked slightly higher, but uncertainty about ongoing trade negotiations and the government shutdown are cause for some concern.
Click here to download the complete weekly report: EWMWeeklyReview 1.28.19
- Domestic equities traded higher, helped by an end-of-the-week boost. Large capitalization stocks outperformed smaller capitalization stocks, while growth generally outperformed value. International equities also ended higher, with Emerging Markets outperforming Developed stocks.
- Treasury yields rallied after positive news on US/China trade. The yield on the US 10-year Treasury Note reached 2.79%, up from last week’s 2.70% close.
- Oil prices increased supported by OPEC cuts in December, which showed their collective output fell by more than 751,000 barrels a day in the month. The West Texas Intermediate is approximately 3% higher than the previous week.
- Tesla shares dropped as much as 9% during Friday trading, as CEO Elon Musk called for 7% job cuts, citing price competition as a headwind for future growth.
- In other economic news, unemployment came in at 3.9%in December, and wages rose a solid 3.2% last year, all while the Federal Reserve’s preferred gauge of inflation, after removing food and energy, rose 1.9% as of November over the prior year.
Click here to download the complete weekly report: EWMWeeklyReview 1.22.19
- Asian stocks rallied to five-week highs on Friday, tracking positive sentiments from US-China trade talks, whereas European markets remained flat by the end of Thursday’s trading session, as automakers announced job cuts.
- The yield on the 10-year Treasury Note traded higher during the week, reaching 2.74% on Thursday. The yield increased seven basis points in four trading days, and the yield on the 30-year Treasury bond increased by three basis points to 3.06%.
- The US Dollar hit a three-month low in the middle of the week before stabilizing on Thursday
- Oil prices traded considerably higher for the week until Thursday. West Texas Intermediate crude futures have risen nearly 25% since their December lows. Oil has risen for its tenth consecutive session, making it the longest rally since 2010.
- Department store chain Macy’s shares fell more than 17% on Thursday. The sell-off was triggered after Macy’s cut its earning forecast for the year, following disappointing holiday sales. The dismal sales numbers also prompted a broader sell-off across the retail industry.
- Among major economic data, the ISM Non-Manufacturing Index slipped to 57.6% in December from the 60.7% reading in November. Initial unemployment claims decreased by 17,000 to 216,000 for the week ending January 5.
Click here to download the complete weekly report: EWMWeeklyReview 1.14.19
APPLETON, Wis., January 9, 2019 /PRNewswire/ — After a good start to the year, volatility returned in 2018. A stronger U.S. dollar weighed on international and emerging markets throughout most of the second half of 2018, although there was no shortage of other investor concerns. Global recession fears, U.S. Federal Reserve rate hikes and higher interest rates, slowdown in corporate profits, an escalation in the U.S.-China trade dispute and other factors resulted in a global asset selloff that left few asset classes untouched.
Only three of the Index’s nineteen components posted gains in 2018. International developed fixed income (+2.94%), US T-Bills (+1.70%), and managed futures (+0.32%). Eight of the Index’s components posted double digit losses for the year with the worst three being emerging markets-China (-28.05%), commodities-timber (-21.11%), and commodities oil & gas (-19.36%).
Endowment Index™ 2018 Constituent Performance
|Asset Class||2018 Change (%)||Asset Class||2018 Change (%)|
|Intl Developed Fixed Inc||2.94||Intl Real Estate||-9.48|
|Managed Futures||0.32||Intl Developed Equity||-14.20|
|Domestic Fixed Inc||-0.04||Emerging Mkt Equity||-14.69|
|Private Eq-Distressed Debt||-3.67||Commodity-Oil & Gas||-19.36|
|Emerging Mkt Fixed Inc||-5.67||Em. Market Equity-China||-28.05|
|Domestic Real Estate||-5.95|
The Endowment Index™ represents the investable opportunity for managers of portfolios utilizing the Endowment Investment Philosophy™ or who otherwise incorporate alternative investments within a comprehensive asset allocation. The Index provides an objective tool used for portfolio comparison, investment analysis, and research and benchmarking by fiduciaries, trustees, portfolio managers, consultants and advisers to endowments, foundations, trusts, defined benefit/contribution plans and individual investors.
About the Endowment Index™ calculated by Nasdaq OMX®
The Endowment Index™ uses an objective, rules-based construction methodology based upon the portfolio allocations of over 800 educational institutions managing over $500 billion in total assets. Each of the 19 sub-indexes that currently comprise the index are investable, and contained within those sub-indexes are over 33,000 underlying securities. Real-time pricing data on the Endowment Index™ can be viewed under the symbol “ENDOW” through major quote providers, including Bloomberg as well as public websites such as Google and Yahoo Finance. The Morningstar® Index ID for the Endowment Index™ is F00000TPG6.
Disclosure: Information presented is for educational purposes only and is not intended as an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies, nor shall it be construed to be the provision of investment advice. Past performance is not necessarily indicative of future results. Investments involve risk and unless otherwise stated, are not insured or guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any investment strategies discussed herein. ETF Model Solutions, LLC is registered as an investment adviser with the SEC. ETF Model Solutions is an affiliate of Endowment Wealth Management, Inc., an SEC registered investment adviser. Registration does not imply any level of skill or training, nor does it imply endorsement by the SEC or and other securities regulatory authority. You cannot invest directly in an index. Indexes do not contain fees. Performance information contained in this presentation is provided net of any underlying exchange-traded fund expenses, does not include any other fees or expenses. Past performance is not necessarily indicative of future results. A copy of the Firm’s disclosure document, Form ADV Brochure Part 2, is available upon request.