Investment Commentary – June 15th, 2016
Market Indices as of Market Close June 15th, 2016
Dow 17,640 (1.23% YTD)
S&P 2,071 (1.35% YTD)
NASDAQ 4,834 (-3.44% YTD)
Global Dow 2,289 (2,033 52 week low /2,606 high)
10-year Treasury 1.57 (1.53 52 week low /2.49 high)
Gold 1,294 ($1,049 52 week low /high $1,308)
Oil $47.49 ($31.61 52 week low /high $63.77)
T. Rowe price Insight: The Financial Markets and Presidential Elections
While it may be tempting for investors to make portfolio decisions based on anticipated presidential election outcomes, T. Rowe Price managers caution that other fundamental factors, such as corporate earnings and monetary policies, typically outweigh political developments. At the same time, the U.S. stock market has generally performed well during presidential election years.
*T. Rowe Price cautions investors on making investment decisions based on expected election outcomes.
*Fundamental factors such as oil prices, corporate earnings, and monetary policy should outweigh political developments.
*The stock market has generally performed well during presidential election years, particularly when the incumbent party wins.
*Protectionist trade policies could impede economic growth.
*Sectors such as health care and energy could be affected by proposals of leading candidates.
*The stock market has not performed well in the last year of a two-term president.
*Fed policy will not be influenced by presidential politics.
JP Morgan Thought of the week
In June, the European Central Bank (ECB) is set to begin purchasing Eurozone
Non-financial corporate bonds for the first time. As this week’s chart shows, the
ECB has been successful in driving down corporate yields without even buying a
single bond, as yields approached record lows. The potential for large-scale bond
buying in the corporate market has now seen negative yields begin to emerge in
another asset class, as a record 2% of the Eurozone corporate bond index now
trades in negative territory. This number is likely to move higher as the ECB
purchasing begins to pick up over the next few months. Whilst clearly supportive
of corporate bonds, this should also support European high yield debt and
THIS DAY IN FINANCIAL HISTORY
June 15th, 1995: Less than a year-and-a-half after breaking the 800 barrier, the NASDAQ Composite Index closes above 900 for the first time, finishing the day at 902.68.
The views presented are not intended to be relied on as a forecast, research or investment advice and are the opinions of the sources cited and are subject to change based on subsequent developments. They are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investments.