For the week ending Friday July 18, economic data was weak for June but appeared stronger for July, Fed Chair Janet Yellen summarized the state of the economy in testimony to Congress last Tuesday “We have made good progress, but we have farther to go to regain the ground lost in the crisis and the recession”. This week’s data reinforced that. The overall theme was one of a slightly soft June, but early data for July showed strength. Retail sales for June were slightly worse than expected, partially due to weak sales of motor vehicles. Industrial production for June was also somewhat soft, and inflation was slightly higher than anticipated. However, on a positive note, the important metric of jobless claims continues to trend down in July and both the Philadelphia and New York industrial surveys both gave early signals of a strong July. Ongoing tensions in the Middle East and the suspected downing of a Malaysia Airlines plane over Ukraine occupied headlines, but had limited market impact.
The stock markets had a generally positive week focusing more on the promising July data than June’s softness. Our stock fund returns ranged between -0.80% and +1.01% for the week. Value funds made a particularly strong showing up +0.70% to +1.01% for the week. This supports our conviction in our value bias to perform strongly, as it has over the longer term based on our research. Fixed income markets also generally rose with returns ranging from -0.13% to +0.31% with international bonds rising ahead of their domestic counterparts. It was another week where the inclusion of real estate (REITs) in the portfolio was notably helpful, with domestic and international REITs outperforming virtually all other core asset classes that we track this week with returns between +0.99% and +1.36%. 2014 continues to be a notably strong year for REIT performance.
The views expressed represent the opinion of the author and are not intended to reflect those of FutureAdvisor or serve as a forecast, a guarantee of future results, investment recommendations or an offer to buy or sell securities.