July 2008
The month of July witnessed a high level of volatility in the financial markets. Stock prices fluctuated sharply, with the Dow Jones Industrial Average moving in excess of 200 points on several days. In spite of this erratic trading activity, the primary equity indexes finished the month little changed. The bond market had mixed results, with US treasury yields being relatively stable, while tax-exempt bond yields were somewhat lower for the month. The key factor influencing the investment environment continues to be the uncertain state of economies around the globe. Business activity is generally weak, with specific industries (i.e. automotive, retail, airlines, and financial services) under severe pressure. The US economy continues to grapple with credit and housing problems, together with the impact of higher energy prices. As a result, corporations are adjusting to the slower business climate, which has resulted in a softer labor market and rising unemployment.
