Second Quarter 2014 Market Recap
(For the quarter ended June 30, 2014.)
Stocks turned in their sixth consecutive quarter of gains as major benchmarks rose to new heights in June. Over the first half of 2014, the S&P 500 gained 6.1%, the NASDAQ Composite, 5.5%, and the Dow Jones Industrials, 1.5%. All three benchmarks have produced double-digit annualized gains from the depths of the recession in 2009. The economy continued its slow recovery in the second quarter, after sliding backwards during an especially difficult winter. General Motors set new records for safety-related recalls during the quarter even as it reported healthy overall sales. At quarter’s end, GM stock was off roughly 5% from its post-bankruptcy peak.
| Through 6/30/14* | Quarter | 1-Year | 3-Year Annualized | 5-Year Annualized | Closing Value |
| S&P 500 |
4.69% |
22.0% |
14.1% |
16.4% |
1,960.23 |
| Dow Jones Industrials |
2.24% |
12.9% |
10.7% |
14.8% |
16,826.60 |
| NASDAQ Composite |
4.98% |
29.5% |
16.7% |
19.2% |
4,408.18 |
Source: Standard & Poor’s. The S&P 500, Dow Jones Industrials, and NASDAQ Composite are unmanaged indexes. It is not possible to invest directly in an index. Past performance is no guarantee of future results.
*Price only. Does not include dividends.
Winter Proved to Be the Cruelest Quarter When the final tally on the January-to-March quarter was released in June, the economy showed a contraction of more than 2%, larger than expected and greater than earlier estimates. But first indicators for the second quarter suggest that warmer weather brought a significant thaw, with significant job growth, vibrancy in consumer income, and double-digit rebounds in home sales and home prices.
Sentiment Improves The slow economic recovery has driven a similarly slow improvement in consumer sentiment as measured by the University of Michigan’s monthly consumer surveys. At 82.5, the Index of Consumer Sentiment is well above its post-financial crisis trough (57.7) but still similarly below its pre-technology bubble high (110.1).
Bond Market Update The Federal Reserve continues to slow its stimulus efforts. The Fed reduced its volume of bond buying again in the second quarter, and appears to be on track to stop all bond buying by the end of this year. There’s been little obvious impact on market yields from the moves so far. The benchmark 10-year Treasury yield slipped to 2.53% from 2.77% during the quarter, implying an increase in the bonds’ market value.
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Article Credit: Wealth Management Systems, Inc.