Highlights of this Week’s Update:
1. The major U.S. stock indices end last Friday on a down note, but still remained flat for the week.
2. Global turmoil continues but the financial markets hold up (so far) and interest rates head lower.
3. We continue to believe the stock market is overvalued and remain cautious and underweight in stocks for all risk levels.
4. Corporate earnings now in full swing with 46.5% of the S&P 500 companies having already reported.
READ ON FOR MORE DETAILS…………………………….
The major U.S. stock indices held up well in light of the global turmoil that dominated the news last week. With the tensions in Israel and Gaza, along with the situation in Ukraine, the Dow closed out the week only down .8% while the Standard & Poor’s 500 stock index was basically flat for the week ended July 25th. (Google Finance)
Interest rates ended lower, with the yield on the 10 year U.S. Treasury closing the week at 2.47%. Mortgage rates also drifted slightly downward as of last Friday. Gold ended the last week at the $1,305 per ounce level. (MarketWatch)
Global tensions have kept the stock market in check over the past few weeks, but has not yet had any major affect overall. Corporate earnings and economic data continues to come in with mixed results. So far, 46.5% of the S&P 500 companies have reported earnings this quarter, with 56% beating estimates. This is better than expected and has helped offset other issues that could affect the stock market in the short term. (MarketWatch)
We have not changed our current outlook moving forward, and remain under-weighted in our overall stock/equity exposure for all risk levels. Individual stock positions vs. equity mutual funds remain our focus at this time. We feel one of two things will possibly occur in the future: Either corporate earnings will accelerate to justify current prices; or stock prices will fall. We tend to think the latter of the two is the most likely at this point in time. We will keep you posted.
Please don’t hesitate to call if you have any questions, or if we can be of further service at any time.
Your TEAM at F.I.G. Financial Advisory Services, Inc.