Monthly Economic Update February 2016


Monthly Summary
Flat to slightly down stock markets in February were a welcome respite following meaningful declines in January. The seemingly benign month-end results, however, said nothing of the early month downturn or the impressive month-end rally to achieve them.

Throughout the month, investors were faced with conflicting, and in some cases, indeterminate data. Payroll growth slowed in January, yet wage gains accelerated and consumer spending was healthy. The Institute for Supply Management’s manufacturing index suggested contraction, but durable goods orders, industrial production, and capacity utilization all advanced. Inflation expectations declined while actual observed inflation spiked upward. GDP growth for the final quarter of 2015 was revised upward, but an unsustainable inventory adjustment was a key factor. Lastly, the overall housing market continues to show volume and price gains, but the new home market has been constrained by construction headwinds.

By mid-month, a crescendo of investor pessimism collided with a dovish Federal Reserve to drive stock markets and other risk assets higher.

Economic Data

Econ Data Feb

Econ data 2 Feb

Market Returns

Mrkt rtrns feb

Disclaimer

This commentary was written by Robert W. Lamberti, CFA, VP and Co-Chief Investment Officer of Summit Equities, Inc. and 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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