Stocks finished a weak second quarter with a bang (up over 2 percent on Friday). After poor showings in April and May, many people expected the markets to turn in a dismal June. June is usually the second worst month for stocks next to September. However, markets defied expectations once again. The Dow logged its best June since 1997, while the S&P 500 and Nasdaq posted their strongest since 1999 and 2000, respectively. Still the Global Dow was down over 8 percent for the quarter (although our portfolio’s held up much better). Clients will be receiving our quarterly commentary as well as performance reports in the next two weeks.
Friday’s strong finish was due to a surprise agreement by EU leaders to help Europe’s struggling banks. The agreement specified that one banking institution, probably the European Central Bank, will be responsible for regulating banks in all 17 Euro zone countries. This tighter integration is expected to be in place by the end of this year and will be necessary for the Euro to survive as a currency. This tighter integration was opposed by Germany, who wanted to see more budget discipline before it would agree. However, this new structure will make monetary policy much easier to implement which could (and should) benefit all Euro zone countries.