January 2015

Monthly Market Monitor - January 2015 Recap

Market Indices¹ January Year-to-Date
S&P 500 -3.00% -3.00%
Russell 3000 -2.78% -2.78%
MSCI EAFE 0.49% 0.49%
MSCI Emerging Markets 0.60% 0.60%
Barclays US Aggregate Bond 2.10% 2.10%
Barclays Municipal 1.77% 1.77%
Barclays US Corporate High Yield 0.66% 0.66%

Europe’s central bank announced a 1 trillion 1 ½ year bond purchase stimulus program.
WTI crude oil fell $5.46/barrel in January, extending a seven-month price collapse to 52%.
The S&P 500 fluctuated by a 0.92% daily average in January, nearly double the 0.53% daily average during all of 2014.

U.S. equities tumbled in January with all three major indices suffering their worst monthly declines since January of last year. Following a 13.7% 2014 return, the S&P 500 fell 3% last month, whereas a year ago in January the index fell 3.5%. Investor sentiment cooled last month as concerns mounted that slowing overseas growth, together with plunging oil and a strong US dollar are hurting the domestic economy. The S&P 500 fell 1.3% on the last day of January after investors learned the U.S. GDP grew by 2.6% during the fourth quarter, missing estimates and slowing from third quarter growth of 5%. For all of 2014, the economy expanded by 2.4% versus 2.2% growth in 2013. Crude oil futures fell another 10% in January, a seventh straight monthly decline, falling $52.12 per barrel since its most recent $100.36 peak on June 25, 2014. Meanwhile, relative to major world currencies, the US dollar is at its strongest level in over a decade, making American exports more expensive and thus less attractive. The Dow Industrials shed 658 points (-3.6%) during the month, while the NASDAQ Composite declined 2.1%.

Volatility returned with eight of January's 20 trading sessions producing 1% or greater moves on the S&P 500, three of them over 1.5%. Small-cap stocks, as measured by the Russell 2000 Index, underperformed large-caps, falling 3.2% in January. Mid-cap stocks fared better, with the Russell Mid Cap Index declining 1.6%. The Russell 1000 Growth Index fell 1.5% last month, while the Russell 1000 Value Index sank 4%.

Eight of the ten major equity sectors ended lower in January, led by Financials (-6.9%), Energy (-4.8%) and Technology (-3.9%). Utilities, the best performing sector last year up 29%, extended gains by 2.4% last month. Healthcare (+1.2%) also outperformed. Commodities lagged behind stocks and bonds in January with the Bloomberg Commodity Index falling for a seventh month, retreating 3.3%.

The MSCI EAFE Index, a broad measure of 21 global developed markets outside of the U.S. and Canada, gained 0.5% last month. The MSCI Emerging Market Index, an index representing 23 emerging nations' economies, also outperformed the U.S., returning 0.6%.

Treasuries, as measured by the Barclays U.S. Government Bond Index, returned 2.5% in January, its best start to a year since 1988. During the month, 10-year U.S. Treasuries rallied in price by nearly five points, sending its yield down more than 53 basis points to 1.64%, its lowest yield since May 2013 and the lowest in any January since 1988.

U.S. investment grade government, corporate and agency-backed bonds, as measured by the Barclays U.S. Aggregate Bond Index, returned 2.1% last month. The Barclays U.S. Corporate High Yield Index, a proxy for non-investment grade corporate bonds, gained 0.7%. Extending a 9.1% 2014 gain, the Barclays Municipal Bond Index returned 1.8% in January, its thirteenth consecutive monthly gain.

Morningstar Direct (all performance percentages are total return based, which include reinvested dividend, interest)

This information is compiled by Cetera Investment Management.

About Cetera Investment Management
Cetera Investment Management LLC provides passive and actively managed portfolios across five traditional risk tolerance profiles to the clients of financial advisors, who are affiliated with its family of broker-dealers and registered investment advisers. Cetera Investment Management is part of Cetera Financial Group, Inc., which includes Cetera Advisors LLC, Cetera Advisor Networks LLC, Cetera Financial Specialists LLC, and Cetera Investment Services LLC.

About Cetera Financial Group
Cetera Financial Group, Inc. is the cornerstone of the retail advice division of RCS Capital Corporation (RCS Capital) (NYSE: RCAP), which is focused on serving the needs of investors with best-in-class solutions.

Committed to using its collective knowledge and expertise in service to and for others, Cetera Financial Group is focused on the growth of its affiliated broker-dealers and financial professionals' businesses by giving them the industry and market insight, technology, resources and solutions they need to better focus on helping their clients pursue their financial goals. For more information, visit cetera.com.

No independent analysis has been performed and the material should not be construed as investment advice. Investment decisions should not be based on this material since the information contained here is a singular update, and prudent investment decisions require the analysis of a much broader collection of facts and context. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The opinions expressed are as of the date published and may change without notice. Any forward-looking statements are based on assumptions, may not materialize, and are subject to revision.

All economic and performance information is historical and not indicative of future results. The market indices discussed are unmanaged. Investors cannot directly invest in unmanaged indices. Please consult your financial advisor for more information.

Additional risks are associated with international investing, such as currency fluctuations, political and economic instability, and differences in accounting standards.

Affiliates and subsidiaries and/or officers and employees of Cetera Financial Group or Cetera firms may from time to time acquire, hold or sell a position in the securities mentioned herein.

Securities and advisory services offered through Cetera Advisors LLC, member FINRA, SIPC. Cetera is under separate ownership from any other named entity.