Market Update

The Economy

• Economic news showed that the recovery has continued to take hold, echoing our view that the global economy will gradually improve, although growth might be slow for some time. 
• The Federal Reserve raised its discount rate by 25 basis points to 50 basis points but reiterated that the federal funds rate will stay at record lows for “an extended period of time.” 
• Housing starts hit a six-month high in January, and industrial output rose for the seventh consecutive month. 
  The Consumer Price Index (CPI) posted a 0.2% increase, mostly due to higher fuel costs; the increase was less than expected and reflected subdued inflation. 
• Jobless claims grew unexpectedly by 31,000 to a seasonally adjusted level of 473,000. 
• Inflation in the U.K. rose in January to a full percentage point over the 2% target rate, but the Monetary Policy Committee stated it would not be tightening policy in the near term. 
• U.K. retail sales dropped well below economists’ forecasts, as winter weather hindered consumer spending.

Economic Calendar 

• The Dallas Fed Manufacturing survey will be released February 22. 
• Consumer confidence and the Richmond Fed Manufacturing Index will be released February 23. 
• New-home sales will be released February 24. 
• Durable-goods orders, initial jobless claims, continuing claims and the Philadelphia Fed Manufacturing Index will be released February 25. 
• Gross domestic product, personal consumption expenditures, the University of Michigan Consumer Sentiment Index and existing home sales will be released February 26.

Stocks

• Global markets posted solid gains on news that the economic recovery is slowly taking hold. 
• In the U.S., value stocks modestly underperformed their growth counterparts, and small-cap stocks outperformed their large-cap brethren. Industrials led the way, while Telecommunications lagged. 
• In the U.K., Financials and Materials led, while Utilities, Healthcare and Telecommunications lagged. 
• In Europe, Industrials, Information Technology and Financials led, while Utilities, Healthcare and Consumer Staples lagged.

Bonds

• Major government bond prices fell on positive economic data. 
• High-yield bonds significantly outperformed the broader bond markets, and emerging-market debt posted modestly positive returns. 
• U.S. Treasury Inflation-Protected Securities (TIPS) were mostly unchanged after the CPI numbers were released, showing that expectations for inflation are still minimal. 
• Yields on the U.K. 10-year gilt rose to 302 basis points, higher than the two-year and the most since mid-November.

Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns do not reflect any management fees, transaction costs or expenses.  Indexes are unmanaged and one cannot invest directly in an index.  Past performance does not guarantee future results. Diversification may not protect against market risk.  There are risks involved with investing, including loss of principal. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results.  This information should not be relied upon by the reader as research or investment advice.  This information is for educational purposes only. 

SEI Investments Management Corporation (SIMC) is the adviser to the SEI Funds, which are distributed by SEI Investments Distribution Co (SIDCO).  SIMC and SIDCO are wholly owned subsidiaries of SEI Investments Company. To determine if the Fund(s) are an appropriate investment for you, carefully consider the Fund’s investment objectives, risk factors and charges and expenses before investing. This and other information can be found in the Fund’s prospectus, which can be obtained by calling 1-800-DIAL-SEI.  Please read it carefully before investing.