Review & Outlook

Our take on the investing, financial, & economic themes of the day

A Quick Half-Year Market Review

30 June, 2014 by Ben O'Brien in Commentary

It’s been a good year so far in the market. There have been plenty of worries with the slowing economy, Federal Reserve uncertainty and debt crisis in Puerto Rico at home and crises abroad in Syria, Russia and Iraq. But still the S&P 500 index closed the half-year mark up about 7%. The Dow Jones Industrial Average of large cap stocks did considerably worse, up only 2.5%. After a tremendous run, beating large caps for many years, small cap stocks as measured by the Russell 2000 index also underperformed, up about 3% for the first half of the year.

How did the performance play out exactly? Breaking with the pattern of the last several years during the recovering since the financial crisis, defensive sectors led the way, with Utilities and Healthcare among the strongest performers. The S&P sector returns were as follows:

sectors

 

 

 

 

 

 

 

 

Some of our standout stocks for the first half were Schlumberger (SLB) up 30.7%, Apple (AAPL) up 14.7%, Johnson & Johnson (JNJ) 14.6% and Nextera (NEE) 18.6%.

In an article today the Wall Street Journal noted:

From stocks to bonds to commodities, world financial markets have rallied in unison during the first half of 2014, a feat not seen in more than 20 years and a reflection of investors’ optimism that central-bank policies will boost growth.

Six closely tracked gauges of world stock, bond and commodity performance are headed for gains in the first six months of the year, the first time they have done so since 1993. The Dow Jones Industrial Average is up 1.7% for the year, putting it on pace for its fourth-straight first-half rise.