Top Stories Last Week
- Disappointing Spanish bond auction
In an auction of medium-term debt, Spanish government only sold €2.6 billion ($3.5 billion), which was at the bottom end of the €2.5 billion to €3.5 billion target it was looking to raise from the sales of bonds. The ten-year yield rose by 22 basis points to 5.63%. A month ago, the yield was 4.9%. European stock markets tumbled as a result.
- US economy added 120K jobs, much lower than expected
The U.S. Labor Department said employers added 120,000 jobs, the fewest in five months and much less than the median economist forecast of 205,000. Yields on 10-year Treasuries dropped by 13 basis points and S&P 500 futures tumbled 1.1%.
- Global PMI manufacturing reports
PMI manufacturing indexes from US to China and UK are showing expansions in manufacturing activities in March, though Euro-zone’s manufacturers are continue struggling. Chinese manufacturing index rose to 53.1 up from 51 in February. The March reading in the official report was the fourth consecutive monthly increase. The report has helped to ease concerns about a potential hard landing for the world’s No. 2 economy. The US gauge rose 53.4, better than economists’ forecasts. It provides further sign on the world’s largest economy’s gaining a stronger foothold.
- ECB, BOE, RBA kept interest rates on hold
European Central Bank, Bank of England and Reserve Bank of Australia kept interest rates on hold at 1%, 0.5% and 4.25%, respectively, though all of them recognized the improving outlooks of the economies.
Top Stories to Watch This Week
- Global Inflation Reports
The US, Germany and China will report consumer price index. Watch out for signs of inflation picking up.
China: CPI is expected to increase to 3.4% from 3.2% YOY.
Germany: CPI is expected to decline to 2.1% from 2.3% YOY.
US: CPI is expected to decline to 2.6% from 2.9%.
- Chinese GDP
Chinese economy is expected to slowdown further to 8.4% from 8.9% last quarter.
- Bank of Japan meeting
Bank of Japan will meet to decide monetary policy and is expected to keep interest rate unchanged at 0.1%.
Weekly Performance Summary
All the portfolios declined slightly as results of negative performance of all risk assets during the week.
Table 1: ETF Performance
| Asset Class Return | Last Week Return | MTD Return | YTD Return | ||
|---|---|---|---|---|---|
| Equities | |||||
| SPY | US Large Cap | -0.7% | -0.7% | 11.9% | |
| IWM | US Small Cap | -1.5% | -1.5% | 11.0% | |
| EFA | Developed Market Equity | -3.4% | -3.4% | 7.0% | |
| VWO | Emerging Market Equity | -0.7% | -0.7% | 13.0% | |
| Dividend Assets | |||||
| IYR | US REIT | -1.3% | -1.3% | 9.2% | |
| AMJ | US Energy Master Trust | 0.0% | 0.0% | 1.6% | |
| Commodities | |||||
| GLD | Gold | -2.4% | -2.4% | 4.2% | |
| GSG | Commodity | 0.2% | 0.2% | 5.7% | |
| Bonds | |||||
| HYG | US High Yield | -0.5% | -0.5% | 2.1% | |
| AGG | US Bond | 0.0% | 0.0% | 0.2% | |
| TIP | US Treasury Inflation Indexed Bond | 0.0% | 0.0% | 0.9% | |
| IEF | US Treasury Bond | 0.5% | 0.5% | -1.4% | |
| TLT | US Long Term Treasury Bond | 0.9% | 0.9% | -6.2% | |
| SHY | US Short Term Bond | 0.0% | 0.0% | -0.1% |
Table 2: Weekly Portfolio Performance
| Portfolio Solutions | WTD | MTD (1 day delay) |
YTD (1 day delay) |
1-YR (as of 12/11) |
5-YR (as of 12/11) |
10-YR (as of 12/11) |
|---|---|---|---|---|---|---|
| Aggressive | -1.2% | -1.2% | 7.2% | 12.4% | 16.4% | 16.1% |
| Moderate | -1.0% | -1.0% | 5.7% | 12.4% | 14.8% | 14.4% |
| Conservative | -0.7% | -0.7% | 4.0% | 12.5% | 13.7% | 12.8% |
| Defensive | -0.5% | -0.5% | 2.4% | 13.2% | 12.5% | 11.1% |
| Concentrated Portfolio | -1.4% | -1.4% | 4.7% | 12.1% | 19.1% | 19.3% |
| S&P 500 Index | -0.7% | -0.7% | 11.9% | 2.0% | -0.3% | 2.9% |
| Barclays Bond Index | 0.0% | 0.0% | 0.2% | 10.3% | 6.9% | 5.8% |
| CPI Inflation | 3.2% | 2.3% | 2.5% |
