Monthly Economic Update February 2015


February Summary
Global equity markets performed well in February on the heels of widespread global monetary support, an extension of Greece’s bailout, a truce in Ukraine, and relatively favorable economic dynamics in the U.S. — particularly in regards to employment. The S&P 500 delivered its strongest monthly return since October 2011 and its best return for a February since 1998. Developed international equity markets did even better.

Despite the exuberance, global growth expectations have actually been dialed down for 2015. Indeed, aggressive central banks are certainly not suggestive of economic strength. Likewise, doubts linger as to whether Greece’s new left-wing government will follow through on required budget cuts and economic overhauls — odds are they will not. Moreover, it is unlikely that Putin will be satisfied with the status quo in Ukraine. As for the U.S., slower international growth and dollar strength are negatively impacting economic activity as well as corporate profits. And year-to-date stock market gains have already exceeded expected earnings growth for all of 2015. Accordingly, stock market advances from here must be predicated on further multiple expansion — a dubious bet when valuations are already at historic highs. In short, go-forward return expectations should be tempered.

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February’s Economic Releases

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Market Returns

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Disclaimers
This commentary was written by Robert W. Lamberti, CFA, Vice President of Investments and a Principal of Summit Financial Resources, Inc. Source of performance: Morningstar®. Indices are unmanaged and cannot be invested into directly. The investment and market data contained in this newsletter is not an offer to sell or purchase any security or commodity. Standard & Poor’s 500 Index (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The MSCI EAFE and Emerging Markets Indexes were created by Morgan Stanley Capital International (MSCI) and designed to measure equity market performance in global developed and emerging markets, respectively. The Barclays Aggregate Bond Index is a market capitalization-weighted index comprised of government securities, mortgage-backed securities, asset-backed securities, corporate securities, and a small number of foreign bonds traded in the U.S. It is used to represent the universe of bonds in the domestic market. REITs, Real Estate Investment Trusts, are securities that invest in real estate directly, either through properties or mortgages. REITs receive special tax considerations and typically offer investors high yields, however, may have liquidity constraints. Past performance does not guarantee future results. Information throughout this Newsletter, whether stock quotes, charts, articles, or any other statement or statements regarding markets or other financial information, are obtained from sources which we, and our suppliers believe to be reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Neither we nor our information providers shall be liable for any errors or inaccuracies, regardless of cause, or the lack of timeliness of, or for any delay or interruption in the transmission thereof to the reader. To unsubscribe from this investment newsletter please reply to this email with “unsubscribe” in the subject. Opinions expressed are subject to change without notice and are not intended as investment advice or a guarantee of future performance. Consult your financial professional before making any investment decision. Securities and Investment Advisory Services offered through Summit Equities, Inc. Member FINRA/SIPC, and Financial Planning Services offered through Summit Equities, Inc.’s affiliate Summit Financial Resources, Inc. 4 Campus Drive, Parsippany, NJ 07054. Tel. 973-285-3600, Fax: 973-285-3666.

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