Another Week of Gains

Good Day and welcome to the middle of March!
The Dow continued on its upward streak as data reported beat expectations! We know about market expectations and how they need to be taken in context, so although expectations might have been set too low, the bottom line remains that the “upward trend” is due mainly to “better than expected” data over recent months. This week saw more of the same as unemployment numbers in the US continued to improve slightly. Do keep in mind however that it is still a long way off from being at a reasonable level but the continued positive trend hasn’t gone unnoticed by investors and this has been driving the markets up.
The broad tracking S&P also ended the week in positive territory, about 0.8% higher than where it started on Monday. I had a reader ask me what’s the difference between all the US indices? So here’s a quick summary of the top 3 indices out of the US.
1. The Dow Jones tracks 30 large publicly owned companies based in the US and is commonly referred to as the blue chip index. It is also the second oldest US market index.
2. The S&P tracks 500 leading companies (in various industries) publicly traded in the US stock market and is considered the broad based outlook (and one of the more common global benchmarks) for the US equities market.
3. The Nasdaq tracks technology companies and is a market-value weighted index.
One thing to remember is that even though these listings of companies are in the US, many of the companies earn profits from abroad, therefore making these indices a good measure of global growth.
Over in Europe some concerns rose again around debt but this is nothing new, and compared to what we saw last year, this time around, the concerns should be less dramatic but still something to keep a keen eye on. We all know Europe has a long way to go before reaching solid ground and although they have made good headway, recovery still remains fragile and is subject to headline news. Similar thoughts revolve around Asia as manufacturing and production numbers continue to be watched closely. China had a slowdown in their numbers last month, so investors will be hoping for stronger numbers next month to reverse the trend and bring numbers back to positive territories!
In regards to commodities we’ve seen a slowdown in movement from both gold and energy sectors but this seems understandable with the current market conditions. We’re not saying that these asset classes won’t fall further nor rise in the short term, but for longer term investors in these sectors, they will provide value, and when they do kick back up, investors who hold these will be glad they did. This is once again, one of the many reasons we recommend continuing to hold a balanced portfolio.
For Austen Morris Associates’ investors – talk with your advisor about any repositioning to take advantage of markets at this time. For more updates on the world financial news please visit our Weekly Global Economic Outlook.
Co-Head of Portfolio Management,
Darren Cox
Austen Morris Associates Wealth Management & Investment Team
www.austenmorris.com