Weekly Update

Weekly Update

for Week Ending July 3rd, 2020
WEEKLY MARKET SUMMARY

Global Equities: US equity markets advanced steadily heading into the July 4th holiday, as investors continued buying despite daily COVID-19 cases eclipsing all prior single-day records as the virus spreads unchecked across the country. The grim virus data has caused some states to delay previously announced reopening measures, but investors were emboldened by better-than-expected jobs data and an extension of the Payroll Protection Act. The S&P 500 rose over 4% while the Nasdaq was up 4.6%. Emerging Markets were able to gain 3.6%, despite escalating social unrest following the implementation of harsh new policies in Hong Kong, which make criticism of the mainland government punishable by lifetime imprisonment. Developed International markets also advanced, although to a lesser degree, posting a 2% weekly gain.

Fixed Income: The yield on the 10-year Treasury Note remained below 0.7% for most of the week, despite the shift back to “risk on” in equity markets. Corporate bonds bounced back after losing some ground last week, with investment-grade bonds and high yield bonds both gaining around 1.4%. Net inflows of $7 billion were reported for investment-grade corporate bond funds while high yield funds reported net outflows of $5.5 billion.

Commodities: Oil prices recovered from last week’s slip, with the US-based West Texas Intermediate crude benchmark reclaiming $40 per barrel. The International Brent crude benchmark was stronger in weekly trading, ending up above $42 per barrel. Saudi Arabia admonished fellow OPEC members mid-week for not holding their end of the production-cut deal, threatening to spark another price war. Gold prices briefly touched a key milestone at $1,800 per oz, before dipping again after the stronger-than-anticipated June jobs data.

WEEKLY ECONOMIC SUMMARY

June Jobs Data: President Trump was able to take a victory lap on the June Employment Report, which came in stronger than expected with 4.8 million new jobs created in the month. The gain matched the prior month and easily beat consensus estimates of a 3-million-job gain. The unemployment rate dipped to 11.1%, an improvement from the 14.7% peak but still higher than any point since the 1940s.

Mortgage Rates at All-Time Lows: The housing market has been supported by low interest rates for some time now, and that trend shows no sign of slowing down. According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average tumbled to a record-low 3.07%. The 30-year fixed rate is at its lowest level since Freddie Mac began tracking mortgage rates in 1971. Despite the extremely low rates, mortgage applications slipped -1.8% for their second weekly decline, as many borrowers may not be able to take advantage due to job loss combined with stricter underwriting standards.

Fed Supportive of More Stimulus: Federal Reserve Chair Jerome Powell, joined by Treasury Secretary Steve Mnuchin, hit all the right notes in their testimony before the House Financial Services Committee, spurring markets higher. Powell noted that the rebound in the markets had occurred sooner than expected but cautioned that reopening may trigger the need for further support, which the Fed is prepared to provide. For his part, Secretary Mnuchin stressed the Trump administration’s desire to provide additional rounds of economic stimulus directly to Americans in the coming months.

CHART OF THE WEEK

The Chart of the Week shows the year-to-date performance of the Vanguard Intermediate-Term Corporate Bond ETF (ticker VCIT), which holds Investment-Grade Corporate Bonds with maturity dates generally within 10 years. The US Federal Reserve has purchased roughly $6.8 billion of ETFs, including VCIT, through the so-called Secondary Market Corporate Credit Facility through June 16. As a result, the Fed is now the 5th largest holder of VCIT and has a significant stake in other fixed income ETFs, pushing them to new all-time highs. Hanlon currently holds a significant allocation to Investment-Grade Corporate bonds across Strategic, Dynamic (All-Weather), and Tactical models.

Chart data provided by stockcharts.com. Commentary and opinions are those of Hanlon Investment Management.




HANLON MANAGED ACCOUNT PLATFORM

The Hanlon Managed Account Platform offers access to Hanlon proprietary models along with models from some of the best asset managers available in a unified managed account program. We provide you with all the tools you need to be successful and deliver a world-class client experience.

Features of the Hanlon Managed Account Platform

  • Intuitive, easy to use Advisor Workstation
  • Model Manager Marketplace with 100 model solutions consisting of Strategic, Dynamic, and Tactical models
  • New Account and Service Account ease
  • Advisor Fee flexibility
  • Billing calculation, collection, and advisor pay
  • Complete Unified Managed Account with unlimited flexibility
  • Proposal generation
  • Keep Non-managed assets in the account, not included in account risk profile
  • Keep Non-model assets in the account, included in account risk profile
  • Designate Reserved Cash in the account
  • Periodic Cash Contributions and Distributions Management
  • Performance and other Reporting
  • Client Portal
HANLON MODEL MANAGER MARKETPLACE

Hanlon’s proprietary screening process which includes longevity, performance and an extensive due diligence process has led us to some of the finest asset managers in the world, shown below.

BlackRock Logo
Dorsey Wright Logo
Hanlon Logo

NorthernTrust
Russell Investment Logo
Wilshire Logo

The information contained herein should not be construed as personalized investment advice and are not intended as buy or sell recommendations of any securities. Past performance is not a guarantee of future results. There is no guarantee that the views and opinions expressed in this Quarterly Report will come to pass. Investing in the equity and fixed income markets involves the risk of gains and losses. An investor cannot invest directly in an index. Unmanaged index returns do not reflect any fees, expenses, or sales charges. The use of a Financial Advisor does not eliminate risks associated with investing. Consider the investment objectives, risks, charges, and expenses carefully before investing. Information presented herein is subject to change without notice. Hanlon has experienced periods of underperformance in the past and may also in the future. Hanlon is an SEC registered investment adviser with its principal place of business in the State of New Jersey. Being a registered investment advisor does not imply any level of skill or training. Hanlon is in compliance with the current federal and state registration requirements imposed upon registered investment advisers. Hanlon may only transact business in those states in which it is notice filed or qualifies for an exemption or exclusion from notice filing requirements. This Quarterly Report is limited to the dissemination of general information pertaining to its investment advisory services and is not suitable for everyone. Any subsequent, direct communication by Hanlon with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For additional information about Hanlon, including fees, services, and registration status, send for our disclosure document as set forth on Form ADV using the “disclosures & privacy” link at www.hanlon.com or visit www.adviserinfo.sec.gov. Please read the disclosure statement carefully before you invest or send money.


Request A Demo


First Name (Required)

Last Name (Required)

Email (Required)

Phone (Required)

Firm Name (Required)

Job Title (Required)

State (Required)

How did you hear about us?



What is a good time to get in touch with you?



What Would You Like To Learn About?


Contact our Sales Team at (609) 601-1200 or Sales@Hanlon.com