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Unemployment Benefits Claims Dropped for the First Time Since Late April

Market Data as of Week Ending 06/26/2020 unless noted otherwise.

EQUITIES
U.S. stock prices declined as new coronavirus cases accelerated across certain regions of the country. Small and medium sized businesses delivered mixed results; however, a clear preference for growth stocks was evident, regardless of company size. Higher growth sectors, such as technology, outperformed while more cyclical sectors, such as energy and financials, declined for the week. Developed foreign stocks in Europe and Asia outperformed U.S stocks for the fourth consecutive week while Emerging Market stocks outperformed developed foreign markets.

BONDS
U.S. Treasury yields declined for the week as investor sentiment pivoted and demand for higher quality bonds increased. Government bonds outperformed while high yield corporate bonds lagged. Investment grade corporate bonds are yielding approximately 2.2% and high yield corporate bonds are yielding more than 6%.

MACROECONOMIC DATA
Initial jobless claims rose by another 1.5 million last week, but Americans claiming ongoing unemployment benefits claims dropped below 20 million for the first time since late April. The IMF downgraded 2020 global growth to a nearly 5% decline, which if realized, would be the largest contraction since 1946.

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Even as jobless claims rise by 1.5 million, investor sentiment remains positive

Market Data as of Week Ending 06/19/2020 unless noted otherwise.

EQUITIES
U.S. stock prices advanced as investor sentiment and favorable economic reports supported risk assets. Small and medium sized businesses delivered mixed performance; however, a clear preference for growth stocks was evident, regardless of company size. Higher growth sectors such as technology outperformed while more defensive sectors such as real estate and utilities declined for the week. Developed foreign stocks in Europe and Asia outperformed U.S stocks for the third consecutive week while Emerging Market stocks lagged developed foreign markets.

BONDS
U.S. Treasury yields were mostly flat for the week as Fed Chair Jerome Powell testified before Congress and made the case for additional fiscal stimulus to support economic growth. Corporate bonds outperformed after the Federal Reserve announced that it will begin buying a broad portfolio of U.S. corporate bonds. Investment grade corporate bonds are yielding approximately 2.2% and high yield corporate bonds are yielding more than 6%.

MACROECONOMIC DATA
Initial jobless claims rose by another 1.5 million last week and there are nearly 20.5 million Americans claiming ongoing unemployment benefits. The Bank of England increased its bond-buying program by GBP 100 billion while Japan reported that the country’s exports declined 28% year over year.

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U.S. Stock Prices Recorded their Worst Weekly Decline in Almost Three Months

Market Data as of Week Ending 06/12/2020 unless noted otherwise.

EQUITIES
U.S. stock prices retreated and recorded their worst weekly decline in almost three months. Market leadership reversed as cyclical sectors such as energy, financials, industrials, and materials underperformed while stocks in defensive and higher growth sectors outperformed. Small and medium sized businesses underperformed as investor sentiment shifted away from higher risk assets. Developed foreign stocks in Europe and Asia outperformed U.S stocks for the second consecutive week and Emerging Market stocks outperformed developed foreign markets.

BONDS
U.S. Treasury yields declined for the week as concerns about the pandemic were priced into financial markets. Higher quality bonds such as government and investment grade corporate bonds outperformed, while high yield lagged. Investment grade corporate bonds are yielding approximately 2.3% and high yield corporate bonds are yielding more than 6%.

MACROECONOMIC DATA
Initial jobless claims rose by 1.5 million last week and there are nearly 21 million Americans claiming ongoing unemployment benefits. The Federal Reserve announced that as their baseline expectation, there will be no interest rate increases through 2022.

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Stocks advanced for the third consecutive week

Market Data as of Week Ending 06/05/2020 unless noted otherwise.

EQUITIES
Stocks advanced for the third consecutive week and recorded the best weekly gain in two months. Cyclical sectors such as Financials, Industrials, and Energy outperformed while defensive sectors such as Consumer Staples, Healthcare, and Utilities lagged. Small and medium sized businesses also delivered solid gains. Developed foreign stocks in Europe and Asia outperformed U.S stocks during the week and Emerging Market stocks outperformed developed foreign markets.

BONDS
U.S. Treasury yields rose for the week as positive economic news pushed the yield on the intermediate and long-term bonds higher. For the third consecutive week, investment grade corporate bonds outperformed government bonds, while high yield was the top performing asset class. Investment grade corporate bonds are yielding approximately 2.4% and high yield corporate bonds are yielding more than 6%.

MACROECONOMIC DATA
The U.S. Labor Department reported that 2.5 million positions were added during the month of May compared to consensus expectations for a decline of around 9 million jobs. In Europe, the European Central Bank increased its stimulus program by EUR 600 billion to EUR 1.35 trillion, extending it until at least June 2021.

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Stocks Advance for Second Consecutive Week

Market Data as of Week Ending 05/29/2020 unless noted otherwise.

EQUITIES
Stocks advanced for the second consecutive week as both investor and consumer sentiment improved. A combination of cyclical sectors (Financials, Industrials, and Materials) and defensive sectors (Real Estate and Utilities) outperformed. Small and medium sized businesses also delivered solid gains. Companies in the S&P 500 are expected to finish the first quarter with an earnings decline of nearly 15% and the consensus forecast for calendar year 2020 is a decline of more than 20%. Developed foreign stocks in Europe and Asia outperformed U.S stocks during the week, but Emerging Market stocks lagged developed foreign markets.

BONDS
U.S. Treasury yields were mixed for the week as short and intermediate term bond yields narrowly declined while longer term yields nudged higher. For the second consecutive week, investment grade corporate bonds outperformed government bonds, while high yield was the top performing asset class. Investment grade corporate bonds are yielding approximately 2.5% and high yield corporate bonds are yielding nearly 7%.

MACROECONOMIC DATA
Initial jobless claims rose by another 2 million last week; however, continuing claims dropped to 21 million recording the first decline since the coronavirus pandemic began. As states begin to let businesses reopen, U.S. consumer sentiment posted a surprise gain in the preliminary May report. Europe and Japan announced additional stimulus measures, but that news was overshadowed by rhetoric from U.S. and Chinese officials threatening the trade deal reached earlier in the year between the two countries.

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