Weekly Economic & Market Update 6/22/2015

Week in Review

Global stock markets were varied this past week as the US stock indexes saw increases, and developed and emerging market indexes saw decreases. As has been the case for a few weeks now, the ongoing talks between Greece and the EuroArea political and financial heads continue to be a market focus. At the heart of the matter is Greece’s debt and ability to repay or renegotiate. If a lasting, sustainable agreement is not found, Greece may have to leave the Euro currency which would put a lot of pressure on the European banks that hold what could become bad debts.

Here in the US, we saw mixed Purchasing Manager Index (PMI) reports from the Philadelphia and New York Federal Reserve Banks. These PMI reports are also known as regional manufacturing reports and they reflect many economic data points for that FED region. The New York PMI came in at -.198 for June versus the previous month of 3.09. The Philly Fed PMI index came in at 15.2 for June versus 6.7 the previous month. The Federal Reserve Bank PMIs have been showing mixed signals from month to month and from region to region.

From both Europe and the US, the release of Consumer Price Indexes (CPI) showed a continuation of mild numbers (less than 1% on a year-over-year basis in both cases) that certainly give the respective central banks more fuel for a continuation of economic stimulus. Since the major central banks of the world (US, Europe, Japan) have gone down the economic stimulus road, a watchful eye has been on CPI. The central banks noted above are all looking for CPI in the 2-3% range but have struggled get the numbers there as consumer demand is still flat.

As always, we continue to watch global market and economic data releases for opportunities and signs of stress.

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

SPX 6.22.15









Chart 2 – Aggregate Bond

AKG 6.22.15









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