A MULTNOMAH GROUP NEWSLETTER October, 2016 - Vol. 10
GDP continued to grow at a sluggish pace with mixed signals from the U.S. economy. Global economic activity remained subdued, but was higher than domestic GDP. The September jobs report was solid, but the pace of job creation has slowed since last year. While U.S. consumer spending weakened in August, new orders for factory goods improved for the month. The trade deficit widened in August as rising imports grew faster than rising exports. Inflation stayed low, but is slowly edging higher.
The S&P 500 closed up 3.9% for the 3rd quarter and 7.8% for the year-to-date. Through the 3rd quarter, the stock market seemed less wary of global risks and U.S. election concerns. The strongest performing sectors for the quarter were technology and financials, returning 12.9% and 4.6%, respectively. Utilities and telecom reported the weakest returns, declining 5.9% and 5.6%, respectively.
International equities performed better than domestic equities for the quarter, but trailed for the year-to-date. There was a wide disparity of returns for individual countries. Developed markets in Europe (ex-UK) increased 6.1% for the quarter while declining 0.4% for the year-to-date. The emerging markets sector had strong returns, increasing 9.2% for the quarter and 16.0% for the year-to-date, recovering its losses from 2015.
During the 3rd quarter, U.S. Treasury bond yields remained near historic low levels. The 10- and 30-year Treasury yields finished the quarter at 1.60% and 2.32%, mainly due to extremely low global yields with over 30% of global government debt having negative interest rates. High yield bonds continued to rally in the 3rd quarter, reporting strong returns for the period.
Commodities weakened in the 3rd quarter, but are still up nearly 9% for the year-to-date. REITs and gold prices cooled off for the quarter. READ MORE
To listen to a recording of Multnomah Group’s Quarterly Market Commentary, CLICK HERE.
On September 20, 2016, Erik Daley, CFA, and Richard J. Pearl, JD, reviewed the recurring claims against retirement plan sponsors and the steps fiduciaries may consider taking to document and to demonstrate prudence – shielding themselves against similar class action suits.
The webinar focused on assisting retirement plan fiduciaries in understanding the following:
To view the Class Action Litigation Against Fiduciaries webinar, CLICK HERE.
“Do we have any socially responsible funds within the plan?” The question usually comes to us from the human resources department of a client--someone responsible for providing participants with information about their retirement plan program. An employee posed the question to them and they don’t know how to respond. We are seeing the question more frequently from our clients. While it is easy for us to answer with a simple “yes” or “no," there is a more nuanced discussion that lies beneath that answer. READ MORE
Recall the twelve lawsuits filed by Schlichter Bogard & Denton against colleges and universities back in August? (If not, read about it here). The cases haven’t gone away yet. Fortunately for plan sponsors though, Schlichter’s filing was just the beginning of the process, as the colleges and universities are now getting their turn to respond. READ MORE