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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Alaska's Eye on Wall Street: see how the markets are doing |
Alaska Journal of Commerce - Jan. 14, 2011 - Jeff Pantages
• Stocks, bonds, and commodities all rose in 2010, the first time that has happened since 2005. U.S. equities gained 15.1 percent as measured by the large cap S&P 500 index while smaller companies did even better. Large cap international stocks (EAFE) lagged but were up 7.8 percent. The emerging markets continued to shine gaining 19 percent last year.
• Bonds rebounded from poor returns in 2010 to post 6.5 percent gains as measured by the Barclays Aggregate Bond Index. Corporate bonds did better than governments. Municipals lagged providing only 4.6 percent returns. Cash was trash gaining about 0.1 percent. You got your money back, but not much more.
• The U.S. economy is in recovery and getting stronger. Still, economists estimate that it was up only 2.8 percent in 2010, not fast enough to make a dent in the stubbornly high 9.4 percent unemployment rate. The consensus outlook calls for 3 to 3.5 percent growth in 2011 and a year-end unemployment rate of 9 percent.
• The main catalyst for optimism in 2011 was the year-end tax deal between the president and Republicans. The extension of the Bush tax cuts for all, new payroll tax cuts, unemployment insurance extensions and new business tax deductions could lift growth by an extra 1 percent this year. However, it is borrowing growth from the future and has worsened the budget deficit to be sure.
• Consumers are in better spirits this holiday season and confidence is slowly improving. Business is in good shape with solid profits and much cash on the balance sheet. White House efforts to rebuild relations with corporate America seem under way. The financial system is healing and U.S. banks are well capitalized. But the residential housing market is still mired in a funk with high inventory levels and weak pricing.
• The Federal Reserve remains concerned about the outlook and has forecast a modest recovery. They are more worried about deflation than inflation and will likely stay too easy, too long. A $600 billion program (dubbed QE2) to buy bonds and keep interest rates low may have backfired as interest rates have backed up partly on inflation fears but also in anticipation of stronger growth this year. Most believe that the Fed will keep short term interest rates close to zero through 2011 unless the unemployment rate falls rapidly.
• Inflation is tame and has trended down to about 1 percent over the past year. Commodity prices are on the upswing. Oil jumped to $90 per barrel and gas prices are well over $3 a gallon. Gold is bubbly just north of $1,400 per ounce. Some agricultural prices have gained on bad weather and poor crops. As yet these price hikes have not been passed through to consumers and have been offset by price declines in other areas such as electronics and apparel.
• Huge cyclical and structural budget deficits as far as the eye can see are rapidly adding to the national debt burden. The 2011 deficit is forecast at $1.2 trillion, or 9 percent of GDP. The credit rating agencies have actually warned of a downgrade of U.S. Treasury debt unless we address these issues pronto. Expect much sound and fury in 2011. Reductions in government spending and possible new taxes taking effect after 2012 (an election year) would be welcome.
• In international markets, Europe is a train wreck. Sovereign debt woes in Greece and Ireland have spilled over to other EU nations. A breakup of the euro is not out of the question. The European banks are shaky. Mega-sized rescue packages by the EU and IMF have not quieted the bond vigilantes. Watch for more fireworks early in 2011.
• China passed Japan as the second largest economy, and Germany as the largest exporter, in the world. Emerging markets and their economies continue to grow strongly but signs of moderation abound. Rising inflation has prompted tightening of policies. Still, the IMF forecasts 9.6 percent growth in China this year. They expect 6.4 percent growth in emerging markets and 2.2 percent in the developed countries.
Next month we'll detail what all of this means for the investment markets in 2011. In the meantime best of luck and have a wonderful New Year.
Jeff Pantages, CFA, is the chief investment officer for Alaska Permanent Capital Management, a $2 billion investment management and advisory firm located Anchorage.
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