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Market Data Bank


2nd Quarter 2014


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It was the sixth year — and sixth quarter — in a row that stocks climbed higher — a bull-market run so strong it is assured a place in history. Five years is a good long stretch. In this case, it was a great stretch. Like all great bull markets, no one saw it coming after the global financial crisis.


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The unlikely bull run lately overcame fears about Federal Reserve “tapering” its monetary stimulus program. While stocks not long ago sputtered at the mention of tapering, by the end of 2Q14, the market seemed to accept that a world without QE just might be okay.

 


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Looking at stock markets globally, 2Q14’s biggest winners were Emerging Markets (+6.5%) and developed countries in Asia Pacific (+5.5%), compared to the S&P 500’s +4.7%. The Eurozone lagged, up just +1.3%. To put this in perspective: it’s fantastic!


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Comparing the stock price performance of S&P 500 10 industry sector indices shows how markets always confound forecasters. Energy distinguished itself by surging with a gain of +11% in 2Q14, followed by utilities (+7%). The financial, telecom, and consumer discretionary sectors lagged.


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Looking at 12 asset classes for the year ended June 30, 2014 shows MLPs and the S&P 500 leading, with gains of +26.9% and +24.9%, respectively, followed by global REITs and crude oil with gains of +15.9% and +14.4%. Laggards were U.S. Treasury bonds with a gain of +3.1%, the euro currency with a gain of +4.8%.

 


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Red squares show expected earnings on the S&P 500 index of blue-chip companies, based on a 6/26/2014 forecast of Wall Street analysts, for $119 per share in 2014 and $133 in 2015. Will stock prices follow the trajectory shown in the markers? No one knows. Events could derail stocks, but the trajectory is positive.

 

  

Past performance does not indicate future results. ± Indices and ETFs representing asset classes are unmanaged and not recommendations for any specific investment. Foreign investing involves special risks, including political or economic instability and currency fluctuation. Bonds offer a fixed rate of return while stocks fluctuate. ¥ Estimated bottom-up S&P 500 earnings per share as of June 26, 2014 was $119.47 for 2014 and $132.96 for 2015. Sources: Yardeni Research, Inc. and Thomson Reuters I/B/E/S survey of consensus estimates. Standard and Poor’s for index price data through March 30, 2014; and actual earnings data through March 2014.

 

 
 
  

 

1st Quarter 2014
4th Quarter 2013
3rd Quarter 2013
2nd Quarter 2013
1st Quarter 2013

This article was written by a professional financial journalist for Conley Investment Counsel and is not intended as legal or investment advice.
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