U.S. stocks gained last week, sending the NASDAQ Composite to 5,133 on Thursday, a fresh high surpassing even its highest intra-day record set back in March 2000. The S&P 500 ended the week within 20-points (0.1%) of its 2,130 all-time high set May 21, 2015. The week was noted by mixed economic data amid uncertainty over credit negotiations between Greece and its international creditors.
Economic highlights include a robust June housing market report that matched last September as the strongest reading of the recovery. Meanwhile, last Wednesday, the Federal Reserve showed it was in no hurry to raise interest rates and is waiting for more solid signs of growth before acting on its vowed lift-off of rate hikes by year-end. Notably, Fed policy makers issued their new quarterly forecasts, trimming this year's GDP outlook to 1.8%-2% from a March view for 2.3%-2.7%. Quite comforting to Wall Street, Fed Chair Janet Yellen said that no matter when the eventual rate normalization actually begins, it will be gradual.
For the week, including the effect of dividends, the Dow Industrials rose +0.66%, the S&P 500 gained +0.78%, and EAFE (Developed International) fell -0.40%.
Here are the 3 stories this week that rose above the noise:
Run on Greek Banks --National Post
"Greece’s banks suffered a €4.2 billion ($5.8 billion) run last week ahead of an emergency European Union summit called for Monday in Brussels on the country’s deepening debt crisis and the continuing standoff between Athens and its foreign creditors.
How much longer the country’s banking system can sustain such withdrawals before strict capital controls are imposed is one of many daunting questions facing Greeks. At stake is the country’s future in the euro, membership in the EU and the most painful question of all: whether the cradle of democracy might soon end up as a failed state."
When Will it Be? Forecasting the First Rate Hike -- The Wall Street Journal
"Goldman Sachs Group Inc. says the Fed won’t act until December.
The investment bank now sees the Federal Reserve raising interest rates for the first time in nine years at its final meeting of 2015, a revision from its earlier prediction that the long-awaited rate liftoff would come in September.
Prior to Wednesday, 72% of economists surveyed by The Wall Street Journal were calling for a rate increase in September, like Goldman.
The Fed’s so-called dot plot released Wednesday alongside its policy statement signals that the central bank expects rates to be lower for longer than it previously thought."
Second Quarter Earnings Outlook -- Zaks.com
"We are still more than a week away from the end of the June quarter, but the 2015 Q2 earnings season has already gotten underway. We have seen results from 7 S&P 500 members already and the tally will have reached 20 by the time Alcoa (AA) reports Q2 result on July 8th.
As has been the trend over the last couple of years, estimates for Q2 came down in the run up to this earnings season. This has prompted many in the market to hope that the negative revisions trend may have gone a bit too far, making it easy for companies to jump through. But judging from the market’s reaction to the admittedly small sample of reports, expectations may not be low enough. That said, it is way too early a stage to analyze the Q2 results."
Articles chosen and summarized by the Tower Square Investment Management team. Tower Square Investment Management provides investment management and advisory services to a number of programs sponsored by First Allied Securities and First Allied Advisory Services. Tower Square Investment Management individuals who provide investment management services are not associated persons with any broker-dealer.
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