Trust

Trust

Weekly Economic and Market Review

The purpose of this weekly update is to provide our clients and prospective clients with a brief summary of market conditions and an update on how the Trust Division views these economic and market activities. Anxiety about the markets is understandable given the great volatility and difficult economic conditions. Our hope is that we can provide information and understanding concerning how assets held with the Trust Division are being protected and managed. If you are interested in learning more about asset management at Union First Market Bank, please contact us.

- The Trust Division's Investment Strategy Committee

Index 1 Week YTD 1 Yr 3 Yr 5 Yr
S&P 500 2.14 17.89 30.71 16.09 5.52
DJIA 1.67 18.38 26.73 16.14 6.38
Russell 2000 2.20 17.84 34.01 14.26 7.62
MSCI EAFE 0.44 11.67 31.96 11.47 -1.30
BarCap US Agg -0.21 0.01 2.18 4.97 5.52

(Figures as of 5-20-13)

Economy

  • Inflation, as measured by the Consumer Price Index (CPI), continued down last month (-0.4%).
  • Typical mixed message on the housing front: Housing permits surprised to the upside; housing starts surprised to the downside.
  • Jobless claims exceeded consensus by 30,000 jobs
  • Wholesale prices, as measured by the Producer Price Index (PPI), dropped in line with expectations (-0.7%).
  • Industrial production dropped last month (-0.5%).
  • Business inventories continue to look lean, which demonstrates discipline by businesses in the face of weaker sales.

Markets

  • Another strong week in the markets with the broad market (S&P 500) up 2.14; for the year it is almost 18%.
  • Healthcare is up 24.83% year-to-date while energy is up only 6.16%.
  • Style investing in the 12 months: Large cap value is up 32.30%; large growth is up 25.98%.

Investment focus

  • Despite all of the economic problems in Europe, the average European stock fund is up 32.40% in the last 12 months.
  • Japan has been experiencing a major rally as well; the average stock fund in Japan is up 47.88% in the last 12 months.
  • Fair Value Ratio
    • Over 1 means the market is overvalued versus an estimate of its fair value.
    • below 1 means the market is undervalued versus an estimate of its fair value.
  • Morningstar Fair Value Ratio is 1.04 or slightly over valued.

Investment products, insurance, and annuity products are:

Not insured by FDIC or any other government agency. Not bank guaranteed. Subject to risk, may lose value, including the possible loss of principal.
Not a deposit. Not a condition to any banking service or activity.  

Any information presented in the Weekly Economic and Market Review is not intended to provide personal tax, legal, nor investment advice. Opinions expressed are subject to change. The investments or strategies presented do not take into account the investment objectives, financial needs, legal, nor tax considerations of particular investors. It is important that you consider this information in the context of your personal risk tolerance, investment goals, legal, and tax situation. Clients should review any planned financial transactions or arrangements that may have tax, accounting, or legal implications with their personal professional advisors.

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Union First Market Bank
P.O. Box 940
Ruther Glen, VA 22546