Weekly Newsletter 8/18/2014

Global equity markets rose fairly steadily into the end of the week when a number of economic data points and ongoing turmoil in Ukraine ushered in volatility.  The mixture of political tensions in Ukraine and a weakening European economy gave investors pause going into the weekend.

In the US on a positive note, the NFIB Small Business survey came in slightly higher from June to July which is a certain positive for the US economy.  Conversely, retail sales in the US, as well as mortgage applications and the New York manufacturing index were all lack-luster.

The big market moving economic data point for the week was the unexpected drop in GDP for not only Europe but also (and more importantly) in Germany for the second quarter of 2014.  The weak European economy of the last few years has been bolstered and held together by a strong German economy.  This is now in question as Germany reported a preliminary annualized year-over-year GDP print for Q2 at .8% versus last year at 2.5%.  By itself the German GDP print is concerning for a European economic recovery.  When coupled with the recent trade war via Russian sanctions, Europe and Germany could slow further.

While Russia and Ukraine are far from the US, the economic impact of a slow down in Europe can certainly have global impact.  We continue to monitor global economic data and global investing markets for opportunities and risks.

Global Market Index Performance

Global Market Perf 8-18-14

Getting Technical with Market Charts

In this section we present charts of the S&P 500 Stock Index and the US Bond Market Index relative to their 50 day (blue line) and 200 day (red line) moving averages.  In addition, we have added the blue shaded area which represents the recent trading channel. The 50 and 200 day moving averages are widely followed market trend indicators that provide a general picture of the health of the broad indexes.

Chart 1 – S&P 500 Index

$SPX 8-18-14

Chart 2 – US Aggregate Bond Index

$AKG update

Global Data Points

Econ data points 8-18-14

 

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Disclaimer – Information contained herein is taken from sources believed to be reliable, but cannot be guaranteed as to its accuracy. Market opinions contained herein are intended as general observations and are not intended as specific investment advice. The Standard and Poors 500 Index is an unmanaged group of securities considered to be representative of the stock market in general. The Barclays Aggregate Bond Index represents securities that are SEC-registered, taxable, and dollar denominated. The index covers the U.S. investment-grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. Contact your investment professional to discuss suitability for your particular circumstances. This article does not constitute an offer of sales of any securities. Securities trading is speculative and involves the potential loss of investment. Past results are not necessarily indicative of future results. Lighthouse Financial Advisors, Inc., dba Lighthouse Wealth Management, is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered, excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the advisor has attained a particular level of skill or ability.

About Katy Chase

Katy Chase, MBA, contributes her own perspective to the team. With previous training in Marketing and French, her perspective offers a mixture of macroeconomic, cultural, and client-focused experiences. In addition, Katy is a baker (with a specialty in chocolate), athlete, perpetual student/learner, volunteer, blogger, Nittany Lion, daughter, grand-daughter, sister, and wife.