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Monthly Market Monitor - February 2015 Recap

Market Indices1FebruaryYear-to-Date
S&P 5005.75%2.57%
Russell 30005.79%2.85%
MSCI EAFE5.98%6.50%
MSCI Emerging Markets3.10%3.71%
Barclays US Aggregate Bond-0.94%1.14%
Barclays Municipal-1.03%0.72%
Barclays US Corporate High Yield2.41%3.09%



  • The S&P 500 rose 109 points to 2,105 in February, its best gain since October 2011.
  • Oil remains volatile, as still rising production cut an earlier 10% intra-month gain to 1.6%.
  • The NASDAQ Composite rose 328 points in February, the most in a month since 2000 and is within 1.7% of its 5,048 tech bubble peak.

U.S. stocks posted solid gains in February as a mix of global issues found several degrees of resolution, boosting investors' risk appetites. After a 3% January pullback, the S&P 500 rallied, setting four all-time highs in February while the Dow Industrials gained 6% to end at 18,133, its best month since January 2013. The technology-focused NASDAQ Composite surged 7.3% to a 15-year high of 4,964. With earnings season drawing to a close, the S&P 500's blended fourth quarter earnings growth stands at 3.7%, up from a year-end estimate of 1.7%. FactSet data also showed that by sector, healthcare and telecom stocks posted the strongest earnings growth, while energy-related stocks had the largest profit and revenue declines. Oil prices rode a roller-coaster, rising from a January low of $45.23/bbl. to as high as $54.29 before ending the month at $49.76. U.S. Fed Chair Janet Yellen told Congress that inflation and wage growth were still too low to raise rates at their next two policy meetings, while Greece won a four-month extension on its bailout loan. Stocks ended slightly lower on February 27th as data showed the economy expanded at a slower pace during the 4Q than previously estimated (2.2% vs.2.6%).

Nine of the ten major S&P 500 sectors posted gains in February, led by Consumer Discretionary (+8.6%), Technology (+8.2%) and Materials (+8%). Energy (+4.1%) rose the least, while Utilities (-6.4%) lagged. Materials (+6%) and Healthcare (+5.6%) are up the most so far this year.

Small-cap stocks, as measured by the Russell 2000 Index, gained 5.9% in February, slightly outperforming large-cap stocks. Mid-cap stocks slightly trailed large-caps, as the Russell Mid Cap Index advanced 5.5%. Growth notably outperformed value with the Russell 1000 Growth Index jumping 6.7%, while the Russell 1000 Value Index rose 4.8%.

The MSCI EAFE Index, a broad measure of 21 global developed markets outside of the U.S. and Canada, outperformed domestic stocks for the month and so far this year, advancing 6% and 6.5% respectively. The MSCI Emerging Markets Index, an index representing 23 emerging nations' economies, rose the most since last May, jumping 3.1% in February and extended its YTD gain to 3.7%.

The US dollar index extended its record-setting upward trend, rising for an eighth straight month. Treasuries, as measured by the Barclays U.S. Government Bond Index, fell 1.5% in February, paring January's 2.5% gain to a YTD return of 1%. As prices fell last month, the yield on 10-year U.S. Treasury notes rebounded by 35 basis points to end February just shy of 2%.

U.S. investment grade government, corporate and agency-backed bonds, as measured by the Barclays U.S. Aggregate Bond Index, declined 0.9% last month, trimming the benchmark's YTD gain to 1.1%. The Barclays U.S. Corporate High Yield Index, a proxy for below-investment grade corporate bonds, advanced 2.4%, extending a 3.1% YTD gain. The Barclays Municipal Bond Index ended a thirteen month rally, falling 1% in February and paring its YTD gain to 0.7%.
  1. Morningstar Direct (all performance percentages are total return based, which include reinvested dividend, interest)

This information is compiled by Cetera Investment Management.

About Cetera Investment Management
Cetera Investment Management LLC provides passive and actively managed portfolios across five traditional risk tolerance profiles to the clients of financial advisors, who are affiliated with its family of broker-dealers and registered investment advisers. Cetera Investment Management is part of Cetera Financial Group, Inc., which includes Cetera Advisors LLC, Cetera Advisor Networks LLC, Cetera Financial Specialists LLC, and Cetera Investment Services LLC.

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