Market Recap- Market Rises On News of Possible Crisis Resolutions

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Market Digest – Week Ending 2/13

Optimism for solutions to the twin crisis in Ukraine and Greece drove stocks higher, though both situations remain far from resolved. The S&P 500 rose 2% for the week to finish at an all-time high. Strong economic growth reported by Germany helped drove International Stocks to modestly extend their lead over US stocks so far in 2015. Utilities stocks sank as investors questioned their yield-based appeal in the face of likely rising interest rates. Bond prices also declined.

Weekly Returns:

S&P 500: 2,097 (+2.0%)
FTSE All-World ex-US: (+2.2%)
US 10 Year Treasury Yield: 2.03% (+0.07%)
Gold: $1,229 (-0.6%)
USD/EUR: $1.140 (+0.7%)

Major Events:

  • Monday – President Obama said he would not supply weapons to Ukraine until European leaders made one more effort to find a diplomatic solution.
  • Tuesday – Apple, the world’s most valuable company, passed $700 billion in market cap.
  • Tuesday – Qualcomm was fined $975 million by China for patent infringement, but avoided more feared penalties.
  • Wednesday – President Obama asked congress for limited authority for military action against Islamic State.
  • Thursday – American Express and Costco announced they are ending their exclusive arrangement after failing to agree on economic considerations.
  • Thursday – Expedia announced it will buy Orbitz for $1.3 billion. Shares of both rose.
  • Thursday – Tesla said sales and earnings fell short of expectations.
  • Thursday – Leaders from Greece and other EU countries struck a conciliatory tone after the previous night when Greece withdrew from a joint statement at the last minute. Negotiations are ongoing.
  • Friday – A federal prosecutor in Argentina requested charges be brought against President Cristina Kirchner for allegedly plotting with Iran to obstruct an investigation into the 1994 bombing of a Jewish community center that killed 85 people.
  • Friday – Eurozone GDP growth for Q4 was reported at 0.3%, modestly ahead of expectations.

Our take:

No bad news was good news. Glimmers of hope for an extended ceasefire in Ukraine and/or a deal to keep Greece in the Eurozone were all investors needed to push stocks higher. Stocks started the year slowly, losing about 3% in January, but closed the week at a new high.

Eventually, this bull market will end, but it hasn’t yet. Sure, any day could mark the top, but it is impossible to predict the peaks of markets. Contrary to popular belief, when a bull market dies, it typically does so slowly in a big rolling pattern. The first three months of a bear market are not the part you want to avoid – it is the last three to six where most of the damage is done.

Market timing in general hurts more people than it helps, but that is especially true for those who jump out while the rocket is still going up.

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Craig Birk, CFP®

Craig Birk, CFP®

Craig Birk is a member of the Personal Capital Advisors Investment Committee. He also serves as Vice President of Portfolio Management. Prior to Personal Capital Advisors, he was an integral leader within the portfolio management team at Fisher Investments. During Craig’s time there, the company increased assets under management from $1.5 billion under management to over $40 billion. His responsibilities included risk management, portfolio implementation oversight, and management of all securities and capital markets research analysts. Mr. Birk graduated from the University of California at San Diego and has earned the Certified Financial Planner® designation.

One Response

  1. Beth

    I wish everyone a happy valentine’s. .and for my little investments to grow even more. .

    Reply

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