Stocks grab a lead at the half

• The debt ceiling is the total amount of money that the U.S. government is authorized to borrow to meet its existing legal obligations, including Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds, and other payments. Failing to increase the debt limit would cause the government to default on its legal obligations.
• Yield is the income returned on an investment, such as the interest received from holding a security. The yield is usually expressed as an annual percentage rate based on the investment’s cost, current market value, or face value.
• Mortgage-backed securities (MBS) are pools of mortgage loans packaged together and sold to the public. They are usually structured in tranches (a slice or portion of a structured security) that vary by risk and expected return.
• Yield curve represents differences in yields across a range of maturities of bonds of the same issuer or credit rating (are (which is used to assess the risk of default of companies or countries). A steeper yield curve represents a greater difference between the yields. A flatter curve indicates the short- and long-term yields are closer together.
• An inverted yield curve occurs when short-term yields exceed long-term yields. While an inverted yield curve historically has predicted economic recessions, it is an indicator—not a forecast.
• The federal-funds rate is the interest rate charged to lending institutions on unsecured overnight loans. It is set by the U.S. Federal Reserve’s Federal Open Market Committee. The rate is increased when the Federal Reserve wants to discourage borrowing and slow the economy and decreased when the Federal Reserve wants to spur economic growth.
• Economic output comprises a quantity of goods or services produced in a specific time period. Monetary policy refers to decisions by central banks to influence the amount of money and credit in the economy by managing the level of benchmark interest rates and the purchase or sale of securities. Central banks typically make policy decisions based on their mandates to target specific levels or ranges for inflation and employment.
• A recession is a significant and prolonged downturn in economic activity. U.S. Treasury bills are short-term debt obligations backed by the U.S. Treasury Department with a maturity of one year or less. U.S. Treasury notes are debt obligations backed by the U.S. Treasury Department with a maturity between one and 10 years.
• The New York Mercantile Exchange (NYMEX) is the world's largest physical commodity futures exchange and is part of the Chicago Mercantile Exchange Group (CME Group), which is the world’s leading derivatives marketplace.
• The National Association of Realtors (NAR) is a trade association that is involved in all aspects of the residential and commercial real estate industries.
• The Conference Board’s Leading Economic Index® is designed to signal peaks and troughs in the business cycle in the U.S.
• The Institute for Supply Management (ISM®) New Orders Index tracks new-order volumes for 18 manufacturing industries.
• The CME Group’s FedWatch Tool analyzes the probability of Federal Open Market Committee (FOMC) rate moves for upcoming meetings, using the 30-Day federal-funds futures pricing data, which have long been relied upon to express the market’s views on the likelihood of changes in U.S. monetary policy.
• Input price inflation measures changes in the prices of materials and fuels purchased by manufacturers for processing.

• The MSCI All Country World Index (ACWI) is a market capitalization-weighted index that tracks the performance of over 2,000 companies, and is representative of the market structure of 48 developed and emerging-market countries in North and South America, Europe, Africa, and the Pacific Rim. The index is calculated with net dividends reinvested in U.S. dollars.
• The ICE BofA U.S. High Yield Constrained Index is a market capitalization-weighted index which tracks the performance of U.S. dollar-denominated below-investment-grade (rated BB+ or lower by S&P Global Ratings and Fitch Ratings or Ba1 or lower by Moody’s Investors Service) corporate debt publicly issued in the U.S. domestic market.
• The ICE BofA U.S. Corporate Index includes publicly issued, fixed-rate, nonconvertible investment-grade (rated BBB- or higher by S&P Global Ratings and Fitch Ratings or Baa3 or higher by Moody’s Investors Service) dollar-denominated, U.S. Securities and Exchange (SEC)-registered corporate debt having at least one year to maturity.
• The ICE BofA U.S. Treasury Index tracks the performance of fixed-rate, nominal debt issued by the U.S. Treasury. The S&P U.S. Mortgage-Backed Securities Index tracks the performance of U.S. dollar-denominated, fixed-rate and adjustable-rate/hybrid mortgage pass-through securities issued by Ginnie Mae (GNMA), Fannie Mae (FNMA) and Freddie Mac (FHLMC).
• The KBW Regional Banking Index tracks the performance of U.S. regional banks and thrifts that are publicly traded in the U.S.
• Consumer-price indexes measure changes in the price level of a weighted-average market basket of consumer goods and services purchased by households. A consumer price index is a statistical estimate constructed using the prices of a sample of representative items whose prices are collected periodically.
• A purchasing managers’ index (PMI) tracks the prevailing direction of economic trends in the manufacturing and service sectors.
• The S&P Global/CIPS Flash UK Manufacturing Output Index measures the activity level of purchasing managers in the manufacturing sector of the U.K. A reading above 50 indicates expansion in the sector; below 50 indicates contraction.
• The S&P Global/CIPS Flash UK Services PMI Business Activity Index measures the activity level of purchasing managers in the services sector. A reading above 50 indicates expansion in the sector; a reading below 50 indicates contraction.
• The HCOB Flash Eurozone Manufacturing Output Index measures the activity level of purchasing managers in the manufacturing sector of the eurozone. A reading above 50 indicates expansion in the sector; below 50 indicates contraction.
• The HCOB Eurozone Services PMI Activity Index measures the activity level of purchasing managers in the services sector of the eurozone. A reading above 50 indicates expansion in the sector; below 50 indicates contraction.
• Producer-price indexes (PPI) measure the average change over time in selling prices received by domestic producers of goods and services.
• The S&P 500 Index is a market-weighted index that tracks the performance of the 500 largest publicly traded U.S. companies and is considered representative of the broad U.S. stock market.

While considerable care has been taken to ensure the information contained within this document is accurate and up-to-date, no warranty is given as to the accuracy or completeness of any information and no liability is accepted for any errors or omissions in such information or any action taken on the basis of this information.

The value of an investment and any income from it can go down as well as up. Investors may get back less than the original amount invested. Returns may increase or decrease as a result of currency fluctuations. Past performance is not a reliable indicator of future results. Investment may not be suitable for everyone. If you should have any doubt whether it is suitable for you, you should obtain expert advice.

Index returns are for illustrative purposes only, and do not represent actual account performance. Index returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index.

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