Fort Walton Beach Council agenda — 08-27-13--regular — reading text

sav sou largest quarterly drop since the second quarter of 2004. The dramatic losses Prose. no. 21 11 rere breadbread - - basedbased asas allall majormajor sectors sectors movedmoved sharplysharply lower.lower. Investment Investment guide credit suffered the largest decline with a decrease of 33% The U. S_ Ruese111000 Treasury and MSS sectors each returned 1. 9 %. The poor Second quarter w.ssdl MMmp YY performance pushed the year-to-date and trailing one -year returns on the Pussml2o Barclays Aggregate Index Into negative tenitory . US Ape alal cop US Tay 44 mirolow mw US Mus TIPS mw Mus EE nana o% . soxsox 00%00% soxsox l00%l00% voxvox Z00%Z00% 211%211% aovaov acac SoleSole lnve9menrlnve9menr MeMe In,In, furfur ZZ  The Market Env S-' Domestic Equity Style Index Performance As W rime as ad Within the U. S. equity market all arse groupings produced positive ` pecomanoz. Small caps, as represented by the Russell 2000 Index, were Quarter Performance- Russell Style Series n ahead of their large cap peers. For the third consecutive quarter, small caps r a outperformed large caps in aggregate. The return for the Russell 2000 Idea la4e o 3. 1 %) outpaced that of the Russell 10W ( +27 %)by 40 basis points ( bps). bal ocad, Equities, which were up as much as 4% earlier in the quire, were dbvn lower as a result of Fed Chaiman Bernard, s influential comments. Although the revision to the first quarter s GDP was disappointing at 1 . 8 % vs. ro are original report of 2 E %, the main cause of the change was spending cuts leoo Grwtr by the federal government sue to the sequester. The market gains during the period were largely driven by the consumer sector. Housing posted Impressive gains with building pennts running rear the one million rate once Mlacap Value uncap Iota again ( up from just below 800,000 year over year), and home prices are Y showed strong signs of recovery in more markets. Retail sales also mmcap Vu. Improved n Price- toeamings( PE) multiples rose to their highest levels In three War, As 2o00iaa the economic recovery has broatlered, consumer confidence readings have C It' s Grwle improved and are near six War highs, Consumer cortitlenoe readings are an Is important preditlor Per consumer spelling a ourmng for 70% of the U S nomy, which Influence and drive the markets. Corporate profits also 1 - year Performance- Russell Style Series ° continue to show a steady advance all are 20% above the peak a tho last c Iona vane a recovery cycle In 2006. sx The quavers ( onward S& P 500 PE to was 13. 8X ( on forward 12month anon Gcaren s% cece EPS estimates of $ 116, 12). placing the S& P 500 above the 5 -year average ro forward PE of 12aX but below the 10 -year forward PE of 14. 1X, which loonloon wareware axax o suggests equities were not ovemnced but were not tenibly atleainve either, Forward estimates aligned with Dast 12 month earnings trends, which reflect loon male Pb 33 loon suall r% the record cancer, levels for the S& P 500 that was driven by heightened CC pmft margins but flat revenue growth. u MIOCap Value At 13gX current PE. the large cap blend ( Russell 1000 Index) segment mmcap lade, ax sported the most favorable valuation when compared to its 20 year M1istchi 11 reek average of 162X ( 862 %). Small cap value ( Russell 2000 Value lack) was rel GmMh the ` nkheaf of the traditional style box segments at 107, 2% ( 15. 3X cadent vs 142X historical)- 1000 Value e 11 E 2000 Grow 2T% e 111 6. 0% tort% 150% 100% 169, IOM