Market Summary – June 14, 2013

Overall, major stock indices bounced around last week, with sharply higher volatility becoming the norm and bond yields have climbed broadly. Market volatility climbed last week as investors focused
on the US Federal Reserve’s anticipated phasing out of its monetary stimulus program. Initial US jobless claims fell unexpectedly by 12,000 to a seasonally adjusted 334,000 for the week ended June 8th, near a five‐year low. US retail sales were also surprisingly strong in May, rising 0.6% as consumers bought more automobiles and other goods. The June initial reading of the Thomson‐Reuters/University of Michigan consumer sentiment index fell to 82.7 from a final reading of 84.5 in May. The producer price index rose 0.5% in May, more than the 0.1% anticipated increase, but core prices rose just 0.1%. Industrial production was unchanged in May.

Japan’s financial volatility dominated global market trends again. Since the roaring Tokyo bull peaked on May 22nd, the Nikkei Stock Average has tumbled more than 20%. Japan’s revived economy grew at an annualized pace of 4.1% in the first quarter based on the government’s revised gross domestic product figures. The positive news on Monday briefly stabilized the Japanese stock market, which had tumbled since its peak. Since that date, the yen has also strengthened considerably. The latest Chinese government reports indicate industrial production and exports failed to meet expectations, extending a string of recent disappointments in reports on the world’s second largest economy.

The S&P 500 Index lost ‐1.01% and the DJIA fell ‐1.17% last week. Telecomm (1.78%), Consumer staples (0.26%) and health care (0.10%) led the S&P 500 Index sectors, while energy (‐2.47%), technology (‐1.83%) and financials(‐1.79%) were the worst performing sectors. Crude oil gained 1.90% and natural gas dropped ‐2.48%. The yield on the 10 year U.S. Treasury closed the week at 2.13%.

Market Summary June 14

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