“Let June 23rd go down in history as our Independence Day!” Nigel Farage, Leader of Britain’s Independence Party.
“Britain was already independent. In fact, it’s what many other countries celebrate their independence from.” John Oliver, HBO Last Week Tonight Show
Britain left the European Union (aka Brexit) in June. The Brexit surprise vote to leave the union knocked the S&P 500 down 5.3% in two days. In a swift turnaround, a strong rally drove the index to a second quarter gain of 1.9%. It was a crazy finish to the first half of 2016 as initial uncertainty and fear stormed the global financial markets. The calm after the storm came quickly. Domestic manufacturing data was positive and the impact of the UK’s departure was perceived as not so catastrophic. On the final day of the quarter, the DOW gained 235 points, the S&P was higher by 28, and the NASDAQ added 63. The DOW and S&P 500 turned in their best week of the year and the S&P 500 finished the first half of 2016 with an overall gain of 1.3%.[1]
The Federal Reserve Board did not raise interest rates in the first half of 2016. Global financial concerns and moderate U.S. growth has curbed most possibilities of a June rate hike. Reduced job growth and repercussions from Brexit have tossed cold water on any new monetary policy tightening in the near future.[2]
The best sectors for the first half of 2016 were Telecommunications (+20%), Utilities (+18%), Energy (+12%), Materials (+6%), Consumer Staples (+6%) and Industrials (+3%). The 2-year Treasury bond earns you 0.64% and the 10-year Treasury yields 1.52%. The S&P 500 dividend yield is 2.23%.[3]
These are the best in sports, entertainment and music for 2016: Cleveland Cavaliers are the NBA champs. Dustin Johnson has overcome his final round jitters and won the last two tournaments including the US Open. The Euro Cup football final matches are Germany vs. France, and Wales vs. Portugal. Lin-Manuel Miranda’s “Hamilton” won 11 Tony awards. Broadway had its biggest season ever with 13,317,980 tickets sold and $1.3B in earnings. The top grossing show was not “Hamilton”…it was “The Lion King” with $102.7M. [4] According to Rolling Stone, the best movies thus far in 2016 are “Deadpool”, “Hail Caesar”, “The Fits”, “The Witch”, “Love and Friendship”, and “Zootopia”. The top music albums this year are Beyonce’s “Lemonade”, Radiohead’s “A Moon Shaped Pool”, Mitski’s “Puberty 2”, and David Bowie’s “Blackstar”.
If there is no activity in your account, please be aware that Schwab has decided to stop sending monthly statements. This would include dividends and transactions. You can request monthly statements if you feel that you need them. With online access at any time, we should be able to easily accept this change in service.
National Holdings, the parent company of our legal and accounting advisory firm National Asset Management (NAM), has made two significant announcements recently. First, they are merging with Fortress Biotech for investment purposes. Second, our incredible and inspirational Chairman, Mark Goldwasser, is retiring. “Goldie” has been an outstanding leader in our industry and I’m lucky to call him my friend. Best wishes for a great retirement, spending lots of time with your family, and as you would say…“peace”.
With world terror dominating our media and the upcoming headlines of negativity about to take center stage in our upcoming Presidential election, here are three worthwhile stories from the month of June:
Mark Hill of Camden Point, Missouri, had a special place in his heart for firefighters. They rescued his father twice. After he won the Powerball lottery, he found the perfect way to contribute: he built a new fire station.
Loving husband Brad Bousquet found a way to have an entire community deliver roses to his wife Alissa to commemorate the end of her breast cancer chemotherapy. Brad contacted a local florist and arranged for roses to be sold for Alissa at $10. All proceeds went to the Susan G. Komen foundation. On the last day of her treatment, 500 roses were delivered to Alissa and $4,500 was donated to the foundation in her name. His gift showed not only how much he cared…but also how much his town cared for Alissa and ending cancer.
When an Army major learned that only four people were attending a funeral for a World War II homeless veteran, she not only decided to attend…she took action. “In the military, we don’t serve alone, therefore we should not die alone,” Major Jaspen Boothe said. Boothe, a formerly homeless vet who runs a nonprofit called Final Solute, posted an invitation to the funeral in every place she could imagine. “I was thinking my efforts would make maybe 20 to 30 people show up, but when I arrived, there were hundreds of cars lined up.”
Independence Day gives us a time to reflect and to say thank you to people who have fought for our freedom…and to the members of the military who continue to serve and to protect our liberties. This week, the world lost one of our greatest freedom fighters, Elie Wiesel. He was a survivor, a writer (“Night”), a Nobel Laureate, and a tireless advocate of justice and peace. “Unless you’re 88 years old most of us have not lived in a world without Elie Wiesel. We had a champion who carried our pain, our guilt and our responsibility on his shoulders for generations,” wrote George Clooney in his tribute. “Elie remained optimistic in the darkest days and pushed us to see beauty in humanity,” Melinda Gates said.
“There may be times when we are powerless to prevent injustice, but there must never be a time when we fail to protest.” Elie Wiesel
It’s hard to believe that we are currently in the 86th month of a bull market…the second longest in history. Unless there is a significant domestic or world event to disturb our financial markets, or interest rates climb and corporate earnings decline…it may continue for awhile. In 1965, Mick Jagger talked about how long the Rolling Stones would last, “We’ll probably be around for about a year, maybe a year and a half.”
Today’s the day,
Mitch Fisher
[1] USA Today, Value Line, and Morningstar 6/30/16, [2] Yahoo Finance 7/4/16, [3] JP Morgan Asset Management 6/27/16, [4] Playbill 6/12/16