March 6, 2015

The S&P 500 and NASDAQ Composite started off last week, and the month of March, reaching new bull market highs to close on Monday. The NASDAQ, which had not closed above 5000 since the .com bubble in 2000, was the talk amongst several major media outlets. The rest of the week, however, didn’t fare so well with the markets selling off and the S&P 500 finishing down 1.54% and the NASDAQ off 70 basis points. Much of the narrative last week was focused on strong U.S. economic data, which sparked fears of the U.S. Federal Reserve raising rates a few months earlier than expected. With the U.S. economy gaining steam, the U.S. Dollar spiked and bonds fell on rising rates. The Fed ending their historic quantitative easing program last October combined with an improving domestic economy has caused international markets with easing from central banks to fare much better. This was evidenced by the German DAX being up 1.31% and Japan’s Nikkei 225 being up 92 basis points each last week.

Even with last week’s decline, our Weight of the Evidence model continues to signal for participation in the market on the basis of price, market internals, and relative strength. Given the recent volatile range in December and January, the breakout in February was arguably expected to wane at some point which we witnessed late last week. Investors still seem to be clamoring for risk, as evidenced by the tech-heavy NASDAQ’s relative strength over large caps like the S&P 500, even though the minor sell off last week can be seen as an overall positive for the current upward trend. However, given the fact that volatility has picked up since October we will keep a close eye on our trend-model for potential changes of character that might move us into a more defensive posture.

Past performance is no guarantee of future results. Investments are subject to risk, and any of Stadion’s investment strategies may lose money. The investment strategies presented are not appropriate for every investor and financial advisors should review the terms and conditions and risks involved. Stadion’s actively managed portfolios may underperform during bull markets. Some information contained herein was prepared by or obtained from sources that Stadion believes to be reliable. There is no assurance that any of the target prices or other forward-looking statements mentioned will be attained. Any market prices are only indications of market values and are subject to change. The S&P 500 Index is the Standard & Poor’s Composite Index of 500 stocks and is a widely recognized, unmanaged index of common stock price. The NASDAQ Composite is a stock market index of the common stocks and similar securities listed on the NASDAQ stock market and it is highly followed in the U.S. as an indicator of the performance of stocks of technology companies and growth companies. The DAX is a blue chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The Nikkei 225 is a price-weighted stock market index for the Tokyo Stock Exchange and is the most widely quoted average of Japanese equities. It is not possible to invest directly in indexes (like the S&P 500) which are unmanaged and do not incur fees and charges. Any references to specific securities or market indexes are for informational purposes only. They are not intended as specific investment advice and should not be relied on for making investment decisions.