For the week ended Friday, July 11, stock markets fell back posting their biggest fall since April after many strong weeks of growth. Stock funds generally declined within a range of +0.11% to -3.66%. Emerging market funds did relatively better and domestic small cap lead declines after a notably strong June. However, the equity declines were moderated by a good performance for domestic REITs rising +1.22% to +1.25% and fixed income fund returns ranging between +0.04% and +0.58%. As reminder, we include REITs and fixed income in the portfolio as we believe they serve as a counterbalance at times of stock weakness depending on the economic scenario.
There was no major economic news that prompted the weekly stock declines as the week was relatively quiet for major releases. Jobless claim data continued to improve and the minutes of the Federal Reserve June meeting appeared largely as expected. The US federal budget deficit improved more than expected as defense spending fell and tax receipts rose.