Stock Market Struggles in January

Stock markets kicked off the new year with fireworks of a different kind, long after New Year’s celebrations were over. The global and domestic stock indices stumbled in the first few weeks of the month, plagued by a slowdown in Chinese economic growth, geopolitical tensions, a decline in the price of crude oil and a cooler U.S. economy. After several tumultuous weeks, the S&P 500, Nasdaq and Dow Jones Industrial Average began to perk up toward the end of January but not enough to climb out of the hole for the month.

 12/31/15 Close1/29/16 CloseChangeGain/Loss
DJIA 17,425.03 16,466.30 -958.73 -5.50%
NADSAQ 5,007.41 4,613.95 -393.46 -7.86%
S&P 500 2,043.94 1,940.24 -103.70 -5.07%
MSCI EAFE 1,716.28 1,591.46 -124.82 -7.27%

*Performance reflects price returns as of market close on January 29, 2016.

On the economic front, real gross domestic product rose at a 0.7% annual rate in the initial estimate for the fourth quarter, reflecting drags from foreign trade and slower inventory growth. Domestic demand was moderately strong, at a 1.8% pace, reflecting a slowdown in consumer spending growth, further improvement in home building, and a mild contraction in business fixed investment (mostly energy-related and transportation equipment).

In its most recent policy statement, the Federal Open Market Committee acknowledged the slower economic growth in late 2015, but also pointed to further improvement in the labor market. Non-farm payrolls averaged a 282,000 monthly gain in 4Q15, while the unemployment rate fell to 5.0%. Despite these bright spots, global economic and financial concerns continued to weigh on market sentiment. While remaining optimistic about the prospects for the U.S. economy, Fed policymakers noted downside risks from the rest of the world.

Raymond James Chief Economist Scott Brown cautions that slower growth isn’t the same as a contraction. He sees potential for moderate long-term growth in the U.S. economy and further improvement in the job market in 2016. However, global conditions bear watching closely. Mike Gibbs, managing director of Equity Portfolio & Technical Strategy for Raymond James, believes the years-long bull market is being tested by several factors, but still has life left in it.

I’ll continue to monitor the issues at hand and pay close attention to the latest economic data, as well as price fluctuations in the markets. And I’ll be sure to let you know if any of these trends presents a buying opportunity for you or could affect your long-term financial plan.

In the meantime, please feel free to call me if you have any questions. I look forward to speaking with you.

Sincerely,

Tyler Daly
Financial Advisor
Raymond James Financial Services, Inc.




*Investing involves risk, and investors may incur a profit or a loss. Past performance is not an indication of future results and there is no assurance that any of the forecasts mentioned will occur. Investors cannot invest directly in an index. The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The MSCI EAFE (Europe, Australia, Far East) index is an unmanaged index that is generally considered representative of the international stock market. International investing involves additional risks such as currency fluctuations, differing financial accounting standards, and possible political and economic instability. These risks are greater in emerging markets. The performance noted does not include fees or charges, which would reduce an investor's returns.

Tyler Daly

Tyler has been in the financial services industry since 2004 and with Sandstone Wealth Management and Heartland Bank since 2009. He is Series 7, 66 and Insurance licensed to assist his clients with all their investing, financial planning, and insurance needs. Tyler was recently named to the Forbes List of America's Top Next-Generation Wealth Advisor, which recognizes advisors from national, regional, and independent firms. Tyler graduated from the University of Nebraska-Lincoln with a Bachelor’s Degree in Diversified Agriculture and was born and raised in the Nebraska Sandhills. This gives him an intimate knowledge and understanding of his farming and ranching clients. Tyler is married to Rachel, who earned her Doctorate of Pharmacy from the University of Nebraska. They have two children, Camilla and Cooper. Away from business, he enjoys officiating high school basketball in the winter as well as golfing and team roping in the summer.

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