Market Recap – July 2015
Despite a generally sluggish economy, some mundane corporate earnings reports, the Greek debt crisis, and China's stock market upheaval, stock markets posted moderate gains, for the most part. The biggest gainer for the month was the Nasdaq, up 141 points to 5128, followed by the S&P 500, which ended the month higher by almost 2%. The apparent prevention of a major economic meltdown in Greece may have prompted foreign investors to start buying as the Global Dow finished the month up over 1%. As to the major U.S. stock market indexes, only the Dow remains in negative territory for the year, down 0.75%, with the remaining indexes in the black for the year.
- It is hard to quantify the impact Greece's debt crisis had on the stock market in the United States and around the globe, but it certainly had some influence. The month started with Greece effectively closing its banks and stock market, followed by a national referendum vote against austerity measures proposed by Greece's major creditors as a condition for further bailout loans. With the prospects of Greece leaving the eurozone seemingly inevitable, last-minute negotiations between Greece's Prime Minister, Alexis Tsipras, and eurozone leaders led to an agreement in principal for more bailout funds. In response, the country passed austerity measures that appear to be stricter than those originally proposed but rejected by Greece earlier in the month. Nevertheless, formal negotiations on the terms of a bailout agreement between Greece and its primary creditors continue to take place heading into August.
- July also saw the Chinese stock market continue a period of dramatic volatility. Following several weeks of major losses, the Chinese government intervened in an attempt to halt massive sell-offs and stabilize the market. Still, as the month came to an end, China's stocks continued to suffer major losses, with the Shanghai Composite Index falling over 20% since its June peak.
- Oil prices fell to their lowest level in several months, with crude falling well below $50 (NYMEX) a barrel. Waning prices are largely attributable to Iran's anticipated reentry into the oil-producing market, as well as China's lessening demand for crude oil due to its turbulent stock market.
- Demand for gold is at its weakest level since 2009, with prices falling below $1,100.00.
- The U.S. economy is actually growing, albeit at a moderate pace. The first quarter GDP, which was estimated to have contracted 0.2%, actually expanded by a revised 0.6%. Estimates for the second quarter show an increase in real GDP to an annual rate of 2.3%, influenced by an uptick in exports, a deceleration in imports, and stronger consumer spending.
Eye on the Month Ahead
ANegotiations between Greece and its creditors are expected to continue in August. However, significant internal dissent within the country may impede progress toward a formal agreement. Exports had picked up somewhat toward the end of July, but the continued strength of the dollar may curtail further growth.
Notes: The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. Market indexes listed are unmanaged and are not available for direct investment.
Portions of this market recap were provided by Forefield Financial Communications.
The performance quoted represents past performance, which does not guarantee future results. This summary represents the views of the portfolio manager as of May 31, 2015. Those views may change, and the Funds disclaim any obligation to advise investors of such changes. The Azzad Funds are self-distributed and available by prospectus only. A free copy of the prospectus, which contains information about the Funds’ risks, fees, and objectives, and other important information, is available at www.azzadfunds.com or by calling 888.350.3369. The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks measuring the performance of those Russell mid-cap companies with higher price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000 Growth index. The Dow Jones Sukuk Index is designed to track the performance of global Islamic fixed-income securities, also known as Sukuk. The index includes U.S. dollar-denominated, investment-grade Sukuk that have been screened for Shari’ah compliance.