Market Review
In the second quarter, U.S. stocks returned 3.2% and developed international stocks were down just under -1%. Emerging markets pulled their weight and were up over 5%. U.S. bonds were flat and REITs were down -1.5% for the quarter.
We’re all familiar with the U.S. stock and bond markets, but just in case we’re still fuzzy on the others, here’s a quick refresher on what we’re talking about with all those other finance categories.
Developed International: Companies that operate in Germany, Japan, Australia, Canada, UK, France, Spain, Austria, Netherlands, Italy, Switzerland, Singapore, and Hong Kong. These countries exhibit a high quality of life, developed economy, higher per capita income and widespread infrastructure.
Emerging Markets: Companies that operate in Brazil, Russia, India, China, Mexico, S. Korea, Indonesia, Turkey, Saudi Arabia, and Poland. These countries contain some characteristics of a developed market but are lacking in some standards. (For anyone wondering, these markets make up only about 6.5% of the global market equities – so it’s a small portion).
REITs – Real Estate Investment Trusts: own, operate, or finances income-generating real estate across the world. In other words, these companies own and operate in real estate and are publicly traded on the stock market.
The usual visuals are below:
Economic Review
Real (inflation adjusted) GDP continues to grow. The first quarter grew at 1.4% over the end of last year.
Inflation continues to stay level around 3%. It has been level for almost a year.
The Fed continues to hold the Federal funds rate at a target range of 5.25-5.5%. I’ll admit; I like the rates where they are. If they’re too low, it encourages too much borrowing for businesses and consumers plus makes it very difficult to earn anything in your savings account. I’m sure new homebuyers will disagree and would like rates to be lower, but then asset prices would rise and they’d be purchasing a more expensive house.
30-year mortgages have settled and have stayed around 6.8-6.9%.
Unemployment claims remain very low. And unemployment is at 4%.
Tax, Legal, & Legislative Updates
- Nothing interesting to add for this quarter