Monthly Economic Update May 2015

May Summary
Stocks traded in a tight range in May. Despite light volume and low volatility, the S&P 500 index managed to hit four new closing highs during the period and ultimately finished the month with a slight gain. Investors have been faced with uncertainty over the economy’s health and the timetable of Federal Reserve interest rate hikes. Dollar strength, West Coast port disruptions, and harsh winter weather pushed the U.S. economy into an annualized contraction of 0.7% in the first quarter. Consumers have also been particularly conservative in their spending patterns — unusual in light of fuel savings from the precipitous drop in oil prices. Recent data, however, suggests the economy may be normalizing. Housing, in particular, has experienced favorable dynamics. Household formation rates are back to pre-recession levels, sales volumes are up, and prices continue to rise. Tight inventories suggest ample room for new housing construction.

Outside of the U.S., investors were captivated by a rather dramatic upward move in German interest rates, from near zero, as well as the ongoing saga between Greece, its government, and the country’s creditors. Greece, in desperate need of a deal to meet impending debt payments, has thus far failed to negotiate a package with its international creditors. Failure to do so in a relatively short period of time could result in the nation defaulting on its debt and exiting the euro zone.


May’s Economic Releases


Market Returns


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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