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Posted by on Jul 25, 2013 in AdvisorShares, Market Insight

AdvisorShares Weekly Market Review

AdvisorShares Weekly Market Review

Highlights of the Prior week

 For the week of July 15 – July 19

Stock Markets

Several US stock market indices, with the exception of the technology heavy Nasdaq, set new all-time highs last week as many companies reported second quarter earnings numbers.  The Nasdaq index ended a 15 day streak of gains on Tuesday, the longest such stretch since 1990.  Many financial companies outperformed the market, after several major banks reported good quarters with higher lending rates and reduced defaults.  Economic data was mixed but the market seemed to react favorably to the overall economic landscape.  On the positive side, jobless claims fell to 334,000 after rising slowly for the past two months and a positive report on manufacturing in the Mid-Atlantic region was released.  There were also some bad data points for June, such as a lower than expected retail sales growth number and a decline in housing starts and permits.  Ben Bernanke also helped calm investors’ fears once more, when he said that the Fed would only increase its range for the federal funds rate if employment fell below 6.5% and if the drop is not due to workers dropping out of the labor force.

Bond Markets

For the second week in a row, US Treasury prices rose as yields declined.  For the first time in a while Treasury inflation protected securities were in high demand.  Thursday, July 18th was the first time since 2011 that a newly auctioned TIPS provided investors with a positive real yield.  This is in large part to higher than expected consumer inflation data that was released last week (the headline CPI was up 1.8% y-o-y, while core CPI was up 1.6%).  High yield bonds had another good week, as the asset class sees large net inflows as investors take advantage of a drop in prices caused by June’s sell-off.  Investment grade corporates and bank loans also gained for the week.  While emerging market debt gained for the week, US investors are still taking more money out of the asset class than they are putting in.  Argentina’s bonds benefited from a better than expected GDP growth number, while Egypt’s sovereign debt was boosted by a news of the country securing large loans from its Arab neighbors in the Persian Gulf.

WMU 7.24.14 - Chart 1

WMU 7.24.13 - Chart 2

Sources:
 *Indexes are from Reuters and Yahoo! Finance 4pm closing data
*Gold prices are from EcoWin and J.P. Morgan Asset Management
*Treasury rates are from Bloomberg.com
*Municipal and high yield rates are from Barclays Capital
*30 year mortgage rate comes from the Mortgage Bankers Association (MBA)
 

 Past performance is not indicative of future results.

david@mediaworksllc.com

The AlphaBaskets blog provides frequent market insight and commentary by AdvisorShares Investments, LLC, created by AdvisorShares and other leading active managers.  AdvisorShares Investments is an SEC-registered investment adviser and the investment adviser to the AdvisorShares actively managed ETFs. The views expressed on AlphaBaskets should not be taken as investment advice or a recommendation for any of the actively managed ETFs advised by AdvisorShares.

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