June report reflects on second quarter highlights
MONTHLY MARKET COMMENTARY |
Domestic equity indices finished the quarter higher, while international markets ended mixed. The United Kingdom’s exit from the European Union dominated headlines throughout the last part of the quarter. Strong equity markets leading into the vote suggested the ‘remain’ faction would prevail, however, once votes were tallied, investors fled to safe haven assets, subsequently pushing fixed income yields across the globe lower and certain commodities higher.
For the quarter, the S&P 500 Index gained 2.5 percent, while the Russell 2000 Index of smaller companies increased 3.8 percent. The energy, health care, industrial, telecom and utilities sectors were the top performers, while the information technology and consumer sectors were weaker. Across market capitalizations, small-cap securities generally outperformed their large- and mid-cap counterparts. Across styles, value outperformed growth across large-, mid- and small-caps.
U.S. fixed income markets were positive across all asset classes. Long-maturity Treasuries handily outperformed shorter-dated issues as the yield curve flattened. Investment-grade corporate securities were positive as financial-, utility-, and industrial-related issuers were in the black for the quarter. Lower quality, higher yielding corporate securities experienced gains as well. Other sectors, including mortgage-backed securities (MBS), asset-backed securities (ABS) and municipal bonds all ended higher.
International markets were negative as the MSCI EAFE fell 1.2 percent. Among the largest European markets, France fell 3.5 percent, while Germany posted a 5.0 percent loss. Meanwhile, Italy and Spain declined 9.7 and 7.4 percent, respectively. Within the Pacific region, Japan gained 1.0 percent, while Australia added 0.5 percent. In the emerging markets, the MSCI EM Index ended 0.8 percent higher amid resiliency against the backdrop of largely declining foreign developed markets.