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March, 2015 Review and Outlook

By April 1, 2015September 16th, 2023No Comments

Highlights of this Week’s Update:

  1. S. financial markets and F.I.G. office closed Friday in observance of Good Friday.
  2. Be sure to take advantage of the online tax information under the Liberty system for taxable accounts.
  3. The major U.S. stock indices end the quarter basically flat so far in 2015.
  4. Interest rates dipped in the first quarter, including mortgage rates.
  5. Oil and gold both close out the first three months of 2015 lower.
  6. Various uncertainties provided headwinds for stocks during the quarter, increasing volatility and keeping prices in check.
  7. FED gives vague guidance for interest rates moving forward.
  8. Our portfolios fare well during the first quarter relative to risk.

READ ON FOR FURTHER DETAILS……………………………………………………………

 Good Friday Market Close:

The U.S. markets are closed this coming Friday, April 3rd in observance of Good Friday.  Our office will also be closed on Friday along with the market Holiday.  We wish all of you a very Blessed Easter weekend!

Tax Information Reminder:

Don’t forget to take advantage of the 2014 online tax information for taxable accounts on the Liberty system.  Be sure to utilize the “CSV” file that is available to download the transactions for the full year directly into most tax preparation software programs. This can save you or your tax preparer both time and money.  Call us if you have any questions or need assistance.

The Markets:

The S&P 500 Index ended 2014 at 2,058.90. With the many ups and downs we experienced during the last three months, the broad measure of 500 larger U.S. companies ended the quarter at 2,067.89, or a puny 0.44% return.  The Dow Jones Industrial Average gave up 1.97% in March, leaving the index down .26% so far in 2015.  At the beginning of this year we had said to expect increased market volatility, and for the first quarter, the major stock indices bounced back and forth only to end basically flat. (MarketWatch, Financial Jumble)

Meanwhile, U.S. Treasury yields remained under pressure amid economic uncertainty, low inflation, a Federal Reserve that seems reluctant to raise interest rates, and record low bond yields in Europe (Bloomberg).  This helped keep interest rates lower for the quarter, with the yield for the 10 year U.S. Treasury finishing March at 1.94% compared with 2.17% at the start of the year.  Mortgage rates also fell for the first quarter, with the average rate for a 30 year fixed mortgage around 3.625% at the end of March, and 2.875% for a 15 year fixed rate.  (U.S. Treasury,

Oil prices ended the first quarter lower, with the price per barrel for West Texas Intermediate Crude oil dropping to $47.49 compared with $53.27 at the end of 2014.  Gold also fell, closing on March 31st at $1,187.00 per ounce, down $27.00 per ounce for the first three months of 2015. (CNBC)

The Economy:

There were a number of factors that created headwinds for stocks as the first quarter came to an end. For starters, the surging dollar against the world’s major currencies is a short-term negative for corporate profits.  Just as a rising dollar versus, say the euro, is a huge benefit to American tourists visiting France or Germany, U.S. companies that sell goods in those same euros must translate their sales back into a more expensive dollar. Consequently, it lowers revenues for those same multinationals.

Longer-term, however, a stronger dollar is generally a reflection of a stronger economy relative to its competitors.  The early-to-mid 1980s and the late 1990s come to mind. Though it may hamper exports and work against some sectors, the stronger U.S. economy is likely to attract a greater share of foreign capital, which in turn can fuel an economic expansion.


Oil Prices:

Falling oil prices are supposed to act like a tax cut for consumers, leaving more money available to spend and put back in the economy, helping fuel additional economic growth.  This time, however, the windfall is being saved not spent-at least so far.


Take a look at Figure 2. While total income has gradually risen per data from the Bureau of Economic Analysis (BEA), growth in consumer spending has lagged (BEA); hence, the savings rate has surged – from 4.4% in November 2014 to 5.8% in February.

Nonetheless, oil producers have sharply cut back on capital spending to the tune of about $50 billion, according to the Wall Street Journal. So it seems reasonable to suggest some of the moderation in growth can probably be blamed on the drop in oil, as producers cut back and consumers hang on to the extra cash generated by lower gas prices.

The FED:

The Federal Reserve seems to be in no hurry to raise interest rates this summer; at least that is what the latest comments that came out of the Fed’s March press release suggest. Yet, Fed Chief Janet Yellen won’t rule out the first rate increase in almost a decade at the June meeting. It all depends on continued growth in the labor market and whether inflation shows signs of accelerating. This vague guidance from the Fed creates uncertainty bringing some anxiety to the markets.

Our Outlook:

We had been expecting increased volatility for stocks as we entered 2015.  Also, we felt interest rates would gradually move lower once again before heading higher in the future.  So far, both have occurred during the first quarter.  We made several adjustments to our portfolio allocations for all risk levels at the end of 2014 and beginning of 2015.  So far, these changes have served us well, and we are pleased with the relative performance for all risk levels after the first three months of the year.  We will continue to monitor and make adjustments within portfolios as warranted moving forward.

We wish you all a very blessed Easter weekend!  Please call at any time if you have questions or if we can be of further service in any way.  We look forward to working together in the years to come.

God Bless,

Your TEAM at F.I.G. Financial Advisory Services, Inc.



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1 The Dow Jones Industrials Average is an unmanaged index of 30 major companies which cannot be invested into directly.  Past performance does not guarantee future results.

3 The S&P 500 Index is an unmanaged index of 500 larger companies which cannot be invested into directly.  Past performance does not guarantee future results.

5 New York Mercantile Exchange front-month contract; Prices can and do vary; past performance does not guarantee future results.

6 London Bullion Market Association; gold fixing pricing at 3 p.m. London time; Prices can and do vary; past performance does not guarantee future results.

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