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June was a month with mixed results for stocks as international stocks were down across the board while U.S. stocks were positive. Emerging markets continued their 2018 struggles, down 4.2% in the month. On the other side, U.S. small value stocks were the top performer – gaining 0.8%. Results were slightly positive among bonds, with short- and intermediate-term bonds essentially flat while international bonds posted a gain of 0.5% for the month.  

Economy 

  • First quarter real GDP growth was revised down to an annualized rate of 2.0% – down from the fourth quarter rate of 2.9%.
  • Inflation (CPI) ticked up modestly to a 2.7% gain over last year’s data.
  • The unemployment rate rose slightly to 4.0% due to an increased labor participation rate.

Stocks

  • The S&P 500 gained 0.6% in June, while U.S. small cap (+0.7%) and U.S. small value stocks (+0.8%) posted slightly stronger gains.
  • International stocks were the weakest performers. Specifically, international small value (-2.8%) and emerging markets (-4.2%) were a drag on performance.

Bonds

  • International bonds (+0.5%) and TIPS (0.4%) posted modest gains for the month.
  • Short-term (+0.1%) and intermediate‐term (-0.1%) bonds were close to flat as rising interest rates and political tensions contributed to ongoing uncertainty.

Alternatives

  • Global REITs (+2.5%), managed futures (+1.2%), and reinsurance (+0.1%) posted gains in June, while commodities (-3.5%) gave up their year-to-date gains.

Read our complete June 2018 Economic & Market Commentary for Market Returns Year-To-Date, Market Returns Longer Term Annualized, Economic Indicators, and an Appendix.


Sources: Bureau of Economic Analysis (BEA), Federal Reserve, Morningstar Direct, Standard and Poor’s, JP Morgan. 

This is intended for informational purposes only and should not be construed as legal, investment or financial advice. Please consult your legal, investment and financial professionals regarding your specific circumstances.

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