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U.S. Stocks Finished Their First Winning Week In A Month | Multi Asset Investments Weekly 05-27-2012

Top Stories Last Week

  • US Stocks Finished the First Winning Week in a Month

U.S. stocks finished their first winning week in a month when markets closed on Friday. Facebook's disappointed IPO owned the headlines for much of the week, overshadowing a strong tech rally that saw the Nasdaq Composite add 2.1% over the past five days. The S&P 500 Index gained 1.8% this week and the Dow Jones Industrial Average rose 0.7%.

  • US Home Sales up Across the Country

Americans are buying more homes in every region of the country, the latest indication that the housing market could hit the bottom. An increasing portion of those sales are from first-time buyers. Existing home sales rose 3.4 percent in April to a seasonally adjusted annual rate of 4.62 million, the National Association of Realtors said Tuesday. That nearly matches January's pace of 4.63 million -the best in two years. It is still well below the 6 million that most economists think as healthy markets.

  • Spanish Bank Bankia Sought 19 Billion Euros from Government

The fourth largest Spanish Bank Bankia SA announced Friday that it will seek 19 billion euros ($23.8 billion) from the government in a recapitalization plan, making it the largest bailout in the nation's history. The government said it would provide all funds needed to stabilize the bank. Government official said that at least 9 billion euros would be needed to help cover the bank's exposure to bad loans and repossessed homes.

  • China's Manufacturing Activities Shrank according to HSBC

China's manufacturing activity contracted for the straight seventh month in May, according to HSBC PMI data released Thursday, with export orders shrinking to erase one of the bright spots in the previous month's numbers. Meanwhile, factory orders extended their weakening, declining at a faster rate than in April, the PMI showed. The government's official PMI report will be released this week.

Top Stories to Watch This Week

  • US Job Report

Economists are forecasting that the US added 155,000 jobs in May. While that would be an improvement over the 115,000 jobs added in April and the 154,000 in March, the pace is too weak to lower the unemployment rate, which is expected to hold steady at 8.1%. The job report will indicate how robust the US economy recovery is.

  • PMI Manufacturing Activities

Analysts expect the US manufacturing sector to continue to expand, with ISM reading at 53.8, while forecast a continued contraction in Euro zone.

  • Housing Prices

S&P Case/Shiller Index is expected to increase by 0.2% in March and decrease by 2.5% from last year. This is a further indication of housing markets bottoming out.

Weekly Performance Summary

All the portfolios gained the first week in May as results of positive performance in equity markets.

Table 1: ETF Performance

Asset Class Return     Last Week Return MTD Return YTD Return
Equities          
  SPY US Large Cap 1.82% -5.56% 5.72%
  IWM US Small Cap 2.54% -5.99% 4.18%
  EFA Developed Market Equity -0.02% -10.51% -2.89%
  VWO Emerging Market Equity -0.37% -11.72% -1.67%
Dividend Assets          
  IYR US REIT 2.72% -3.85% 9.11%
  AMJ US Energy Master Trust 2.75% -5.32% -1.68%
Commodities          
  GLD Gold -1.21% -5.68% 0.45%
  GSG Commodity -1.14% -9.90% -5.31%
Bonds          
  HYG US High Yield 0.63% -2.81% 0.86%
  AGG US Bond -0.07% 0.50% 1.55%
  TIP US Treasury Inflation Indexed Bond -0.11% 1.17% 3.82%
  IEF US Treasury Bond -0.14% 1.59% 2.23%
  TLT US Long Term Treasury Bond -0.64% 5.43% 2.76%
  SHY US Short Term Bond 0.04% 0.00% 0.06%

Table 2: 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 1.0% -6.4% 1.3% 12.4% 16.4% 16.1%
Moderate 0.9% -4.8% 1.6% 12.4% 14.8% 14.4%
Conservative 0.7% -3.3% 1.9% 12.5% 13.7% 12.8%
Defensive 0.5% -1.3% 2.6% 13.2% 12.5% 11.1%
Concentrated Portfolio 2.3% -4.7% 1.9% 12.1% 19.1% 19.3%
S&P 500 Index 1.8% -5.6% 5.7% 2.0% -0.3% 2.9%
Barclays Bond Index   0.5% 1.5% 10.3% 6.9% 5.8%
CPI Inflation       3.2% 2.3% 2.5%

For more information about the multi-asset investment strategies, please visit allseasoninvesting.com.

About ALL SEASON INVESTING: All Season Investing is an investment blog, created in December 2011 to offer investors insights and researches on how to implement a dynamic multi asset allocation strategy with the low-cost index funds or ETFs to achieve consistent returns while limiting downside risks through all stages of a market cycle.

Disclosure: I am long SPY, IWM, EFA, VWO, IYR, AMJ, GLD, GSG, HYG, JNK, AGG, TIP, IEF, TLT, VNQ.