Our 3rd Quarter 2014 Capital Markets Review describes a weak global environment for capital markets. The U.S. economy continued to modestly improve with strong 2nd quarter GDP growth and lessening unemployment. The S&P 500 Index reached multiple all-time highs during the quarter, but an early August sell-off gave back much of the gains. Overall, the Index only gained 1.13% during the quarter. Positive results in large cap stocks masked overall weakness in the U.S. equity market as mid- and small-cap stocks posted losses during the quarter.
International stocks underperformed the U.S. market during the quarter as weakness in Europe had the double effect of hurting European equities and strengthening the U.S. dollar. Japan posted better results, but a strengthening dollar erased all of the local gains.
Fixed income markets were basically flat as the Fed continued to signal an end to their bond buying program in October. Even with the conclusion of that program, it is unlikely that rates will rise as inflation is modest and global growth has been weak. Within fixed income, the spread sectors underperformed during the quarter while the broad Barclays U.S. Aggregate Bond Index was up only 0.17%.
To view the slides for Multnomah Group's Capital Markets Review, please click here.