Skip to main content

What Is Driving the Current Financial Markets?--Second Quarter 2013 Recap

We know that many of our clients are concerned about the volatility we experienced in the financial markets during the second quarter of this year. Therefore, we'd like to present our insights into what transpired, what the catalysts were and our forecast for how the markets will react throughout the remainder of the year.

Here is a basic recap of what transpired:
  • The second quarter was a tale of two halves in the U.S., with mixed performance to go along with the mixed economic data.
  • Financial markets reacted strongly in mid May after the Federal Reserve announced that its asset purchase program could soon wind down.
  • All areas of the global fixed-income markets declined as real yields spiked.
  • Global equity performance was mixed, with U.S. stocks outpacing most other regions.
  • In the U.S., small caps led large caps.
  • Emerging markets, encompassing both debt and equity, were laggards on rising treasury yields and uncertain growth in China.
  • Concerns about moderating emerging market growth also pressured commodities.
This graphic illustrates the performance of various financial assets as measured by market indices:

As mentioned, small U.S. domiciled companies slightly out-performed their larger counterparts while emerging markets and fixed income investments had negative returns for the quarter and year-to-date. In other words, this shows that traditionally more conservative asset classes, such as investment-grade bonds, showed negative performance both in the second quarter and year-to-date. Keep in mind that past performance is no guarantee of future performance or success.

The Outlook: Do not Fear the Taper:

While markets experienced a strong reaction to the Fed's taper plans, we are expecting that this initial response, while intense, will not be prolonged or repeated. We also anticipate the following:

  • Interest rates are rising because growth prospects appear to be improving.
  • The U.S. economy continues on a slow but steady expansionary path.
  • Japan's economy is showing some signs of life while Europe may be starting to stabilize. However, despite its stabilization, Europe still has a way to go before pulling itself out of its slow-growth recessionary funk.
  • Inflation remains subdued despite the extraordinary expansion of the monetary base.
  • Emerging market economies are struggling as trade with China and Europe slows and commodity prices fall.  Sliding currencies and weak bond and stock markets are creating opportunities for emerging market investors.

Overall, we expect the stock and bond markets to be volatile over the next few months. However, patience must be exercised and , while it is no guarantee against loss, a diversified portfolio certainly helps.

You can also view this commentary in video format by clicking on the following link:

***Link to Video Commentary***

White House Financial & Settlement Consulting helps busy professionals and entrepreneurs live easier and less stressful lives through the proper management of their financial resources.  We do this by acting as our clients’ trusted advisor and providing a personal touch customized to the client’s needs!  Please visit our web site at  or contact us directly for more information!

Please be aware that we do not provide tax or legal advice, and that the information set forth herein was obtained from sources which we believe reliable, but we do not guarantee its accuracy.  Neither the information nor any opinion expressed constitutes a solicitation by us of the purchase or sale of any securities or commodities.  In addition, past performance is no guarantee of future results.  Diversification does not guarantee against loss; it is a method used to help manage risk.

White House Financial & Settlement Consulting, LLC


114 South Main Street • Suite 300 • Chelsea, Michigan 48118 • Phone: (734) 433-1670 • Fax: (734) 433-1671

Securities offered through Sigma Financial Corporation. Member FINRA/SIPC
Fee-based investment advisory services offered through Sigma Planning Corporation, a registered investment advisor
White House Financial & Settlement Consulting, LLC is independent of  Sigma Financial Corp. and Sigma Planning Corp.


Popular posts from this blog

COVID will not stop us providing unique settlement solutions using structured settlement annuities!

I hope that you are doing well! We just FINALLY completed the settlement of a case for a minor (age 17) that we were initially engaged by our plaintiff attorney client in February 2021, to provide structured settlement annuity quotes! Although the claimant was very close to the age of majority the key to the case was not giving him all of the settlement proceeds, which was over $120,000, at age 18. Having been in this business for over 20 years I cannot tell you the number of sad cases we have witnessed where the young claimant receives their settlement proceeds at age 18 only to blow through all the funds before anyone can blink and make bad decisions with the proceeds! This case involved two liability insurance carriers Liberty Mutual and Member Select. We coordinated multiple rounds of document revisions and had to have a separate set of different documents for each insurance carrier. In addition, one of the carriers would not fund the annuity until we had a fully executed court ord

Using a structured settlement annuity pre-suit

 We recently were engaged by the Guardian Ad Litem (GAL) in the case of an 11 year old boy who was struck by a care while riding his bike.  The father of the boy settled the case directly with the liability auto insurance carrier pre-suit and the GAL contacted us to ensure that the boy's settlement funds were handled appropriately. The case settled for a total of $65,000 and $59,000 was being allocated to the structured settlement annuity for the boy as follows: $5,000 paid immediately upon settlement $10,000 at age 18 $20,000 at age 21 $25,000 at age 25 $35,718 at age 30 this is total benefits of $95,718! The annuity was placed with a large life insurance company rated A+ by the A.M. Best rating agency and provided the family and GAL with the peace of mind that the young man would not receive the entire amount at age 18. In addition, due to the use of the structured settlement annuity, all of the interest gained during the payout period ($31,718 to be exact) is INCOME TAX FREE!  T

9/17/2023 Weekly Market Performance

  Here is our research department's Weekly Market Performance analysis.  If you have questions or need anything else please contact me at (734) 272-4322 or  U.S. and International Equities Markets Mixed The major markets ended mixed this week as the utilities and consumer discretionary sectors led while information technology lagged following Apple’s challenges in China.  Developed international equities posted solid gains this week as European stocks have witnessed their largest gain in six months after the European Central Bank (ECB) signaled an end to its hawkish monetary policy. Next Wednesday, the Federal Reserve meets concerning monetary policy and interest rates.  We believe the Federal Reserve should highlight underlying improvements within the inflation dynamic. In addition, we believe the Fed will not likely declare victory but will probably highlight the risks to growth and inflation are getting into balance. According to the AAII Sentiment