August 10, 2015 | Market Update
It's been another week of volatility in the markets. Contributing to some of the issues we are seeing is the growing US trade gap which increased in June by 7%, as well as the selloff of shares in media companies.
Viacom's 12% loss combined with Walt Disney Co. stocks dropping 8.38% as of Monday have contributed to a greater than 1% loss of the Nasdaq as of close of bell on Friday.
However in interesting news, Warren Buffett's Berkshire Hathaway, Inc's announcement of its purchase of Precision Castparts Corp for $32 Billion dollars sent stocks skyrocketing by 19% and helping boost the S&P 500 which reached its lowest level in six months on Friday.
In other news, the Treasury Department announced that they will soon be proposing new rules that will force some hedge funds and money managers to adopt money-laundering controls similar to big banks. Under the new rules Investment Advisors like Precision Capital Management may be included in these laws. We'll continue to keep you updated as information becomes available.
Additionally, according to data released last week, the US Service Sector expanded at its fastest rate since the recession. This news, along with other data that has been released over the last few weeks, all indicate that our economy is on stronger footing and heading in the right direction, despite the current volatility. All of which means that the Fed is probably still on track to raise interest rates in September. We'll continue to keep you updated and if you still have any money in bonds or mutual funds, make sure to speak with your advisor and ensure you have a strategy to insulate yourself from the current and coming volatility that could be caused by the Fed's announcement.
The chart above shows the S&P 500, Nasdaq & DOW (^GSPC ^DJI ^ IXIC) over a 5-day period from close of bell Monday the 8/10/2015.