Low volatility and strong market returns continued in the month of July. Investors largely ignored the political headlines as they wait to see if any meaningful change will happen with tax reform and healthcare. The S&P 500 Index returned 10.34% while the FTSE All Word Ex-US Index increased 14.06% for the year ending July 31st. For the month of July, the S&P returned 1.93% and the FTSE All World Ex-US increased 3.53%. The strength in international markets supports our prior communications that we believe there is opportunity in the international and emerging markets.
Real GDP increased at an annual rate of 2.6% in the second quarter of 2017, according to an advance estimate released by the Bureau of Economic Analysis. The consumer confidence index rose to 121.1 in July, from 117.3 in June. Unemployment remained little changed at 4.3%, and total non-farm employment increased by 209,000 in July. Despite the small decline in the ISM manufacturing index in July, the index is still above its average level in the second quarter.
At the Fed’s most recent meeting in July, rates were not raised, but we believe there may be a few more rate increases in the next year. In the coming months, the Fed will also be discussing reducing the balance sheet by selling bonds, which could raise long-term interest rates.
Strong corporate earnings reports helped move the markets higher. The majority of companies that have posted Q2 earnings exceeded their estimates.
Going forward, we feel that there is a high likelihood that volatility will increase to more normal levels. We continue to believe that a long-term perspective and a diversified portfolio will benefit investors. If you are a client and would like further detail on these topics or anything else, please don’t hesitate to call or email us. If you are not a client, but would like more information on Callan Capital’s wealth management services, please contact us at (858) 551-3800 or visit www.callancapital.com.
Past performance does not guarantee future results, which may vary. This material is provided for informational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. For more information regarding Callan Capital, please refer to our most recent Form ADV Part 2A which may be found at www.adviserinfo.sec.gov.
S&P 500®: Standard & Poor’s (S&P) 500® Index. The S&P 500® Index is an unmanaged, capitalization – weighted index designed to measure the performance of the broad US economy through changes in the aggregate market value of 500 stocks representing all major industries.
The FTSE All-World ex US Index comprises Large and Midcap stocks providing coverage of Developed and Emerging Markets excluding the US. The index is derived from the FTSE Global Equity Index Series (GEIS), which covers 98% of the world’s investable market capitalization.