July 6, 2015

Last week, equity markets declined as uncertainty over Greece and a mixed U.S. jobs report rattled markets.  For the week, the S&P 500 declined -1.16%, small caps were off -2.67%, international stocks as measured by the MSCI EAFE index were down -2.76% while bonds were flat.  However, for the first half of 2015, the S&P 500 rose 1.23% while international equities fared better.  In fixed income, the US Barclays Aggregate is slightly negative year-to-date as interest rates have risen since the first of the year.  The difference in returns so far this year reminds us again of the importance of diversification.

Last Thursday’s jobs report continued the recent string of strong increases in job growth while it was somewhat disappointing that wage growth was stagnant and labor participation declined.  This continued underlying weakness in wage growth could keep the Federal Reserve to only one small interest-rate increase later this year.

The “no” vote in Greece this weekend only adds to the uncertainty of whether or not Greece will remain in the Eurozone.  We expect continued volatility in markets for the near term as investors evaluate the ramifications of a possible Greek exit.  Despite the short-term noise, we are still constructive on global equities moving forward. Enjoy the summer!

“Blessed are those who give without remembering and take without forgetting.” – Elizabeth Bibesco