Financial News and Portfolio Management Discussion through December 19th

All the news you need to stay informed about what’s currently driving the market – courtesy of Raffa Wealth Management, LLC.

US stocks posted their largest decline since the selloff in late August to end the week. After optimism from the Fed raising interest rates drove stocks higher mid week, stocks tumbled on concerns about global growth, high yield debt and corporate earnings. The S&P 500 dropped 0.3% and the Dow fell 0.8% for the week. Internationally, Europe posted a 1.8% gain and Japan sank 1.3% for the week. The yield on the 10 year Treasury bond ended the week at 2.20% up slightly from the previous week. Oil prices fell still further ending the week at $34.73 a barrel.  Article

In a widely expected move that signals a large departure in policy the Fed elected to raise the Federal funds rate 0.25% for the first time since 2006. The Fed had kept rates near zero for seven years. Moving forward the Fed stated they planned to raise rates gradually over three years. They expected to make four quarter point increases in 2016 based on their forecasts of the US economy.   Article

Brazils’ bonds were downgraded again, this time by Fitch, from investment grade to junk status.

The Bank of Japan announced additional measures to support their monetary easing program.

Profits for companies in the S&P 500 are on pace to fall 0.27% compared to 2014.

Junk bond funds have been hit hard as investors seek to make redemptions.   Infrequently traded bonds are driving large bid ask spreads and one major fund halted redemptions and will unwind over the coming months.

 

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Raffa Wealth Management is an independent investment advisor providing nonprofit organizations, high net-worth investors, and qualified retirement plans with a full range of investment consulting services.  We were established to fill the need for transparency, clarity, and vision in the professional management of investment assets.   Visit us at www.raffawealth.com

 

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