Weekly Economic & Market Update 7/14/2015

Week in Review

This past week global stock markets were mixed with the US relatively flat, developed foreign markets modestly higher and emerging markets down. The overarching drivers of market moves this past week was the Greek economic wrangling and China’s stock market turmoil.

As has been the case for quite some time, Greece went into the weekend with yet another make or break negotiation with the powers that be in Europe. Additionally, Chinese authorities are no longer quietly propping up their stock market. Over the last few weeks the following are the steps the Chinese authorities have taken to keep their stock market from melting down:

• Ban on major shareholders, executives and corporate directors from selling the stocks for 6 months
• Freezing more than half of the listed companies from trading
• Blocking fund redemptions
• Halting IPOS
• Reducing equity trading fees
• Bailing out margin lending
• Reducing margin requirements
• Boosting corporate buybacks of stocks

In the end, as of the end of last week, the Chinese have done everything short of the government just outright purchasing stocks to keep prices up. Obviously, the Chinese stock market diving lower coupled with the slowdown in the Chinese economy is something to pay attention to as China has been helping power the global economy for a few decades.

Developments in Europe and China will likely continue to dominate news flows as the issues are more structural than fleeting. As always, we will continue to monitor global markets for opportunities and stresses.

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 7.14.15

 

 

 

 

 

 

 

 

Chart 2 – Aggregate Bond

AKG 7.14.15

 

 

 

 

 

 

 

 

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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.