Presented by Mark Gallagher

General market news
• The yield on the 10-year Treasury jumped as high as 1.63 percent after Federal Reserve Chair Janet Yellen’s speech on Friday, yet it was as low as 1.53 percent as the market tried to assess the meaning of the language in her speech. On Monday morning, the 10-year opened at 1.61 percent—its highest open since late June. The 30-year remained well within its recent range, opening at 2.27 percent on Monday.
• The S&P 500 declined 0.67 percent last week after negative performance in the health care, consumer, and energy sectors. The health care sector, in particular, fell 1.80 percent after news broke of steep price increases for Mylan’s EpiPen. The Nasdaq Composite Index also fell slightly, by 0.35 percent.
• The economic news from last week was mixed. Although new home sales data for July was strong, increasing to 654,000 homes, existing home sales declined to 5.4 million on thin supply. Durable goods orders showed solid gains, backed by an uptick in orders from the commercial aircraft sector, but the second estimate of gross domestic product growth showed that the U.S. economy grew at a pace of just 1.1 percent, largely due to weak local and government spending.

Source: Bloomberg

Source: Morningstar Direct

What to look forward to
We will touch on several important sectors in this week’s data, including the consumer, manufacturing, and the labor market.

We expect Personal Income to have increased in July, while the ISM Manufacturing Index is expected to have declined slightly in August.

The highlight of the week will be the August Employment report, which will be released Friday.

Disclosures: Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. All indices are unmanaged and are not available for direct investment by the public. Past performance is not indicative of future results. The S&P 500 is based on the average performance of the 500 industrial stocks monitored by Standard & Poor’s. The Nasdaq Composite Index measures the performance of all issues listed in the Nasdaq Stock Market, except for rights, warrants, units, and convertible debentures. The Dow Jones Industrial Average is computed by summing the prices of the stocks of 30 large companies and then dividing that total by an adjusted value, one which has been adjusted over the years to account for the effects of stock splits on the prices of the 30 companies. Dividends are reinvested to reflect the actual performance of the underlying securities. The MSCI EAFE Index is a float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a market capitalization-weighted index composed of companies representative of the market structure of 26 emerging market countries in Europe, Latin America, and the Pacific Basin. The Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000® Index. The Barclays Capital Aggregate Bond Index is an unmanaged market value-weighted performance benchmark for investment-grade fixed-rate debt issues, including government, corporate, asset-backed, and mortgage-backed securities with maturities of at least one year. The U.S. Treasury Index is based on the auctions of U.S. Treasury bills, or on the U.S. Treasury’s daily yield curve. The Barclays Capital Mortgage-Backed Securities (MBS) Index is an unmanaged market value-weighted index of 15- and 30-year fixed-rate securities backed by mortgage pools of the Government National Mortgage Association (GNMA), Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (FHLMC), and balloon mortgages with fixed-rate coupons. The Barclays Capital Municipal Bond Index includes investment-grade, tax-exempt, and fixed-rate bonds with long-term maturities (greater than 2 years) selected from issues larger than $50 million.

Mark Gallagher is a financial advisor located at Gallagher Financial Services at 2586 East 7th Ave. Suite #304, North Saint Paul, MN 55109. He offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. He can be reached at 651-774-8759 or at mark@markgallagher.com.

Authored by the Investment Research team at Commonwealth Financial Network.

© 2016 Commonwealth Financial Network®

Presented by Mark Gallagher

General market news
• The 10-year Treasury yield opened at 1.59 percent early Monday and quickly dropped to 1.54 percent. (It had opened last Monday at 1.50 percent.) The range of 1.58‒1.60 percent seems to be the ceiling for the 10-year, and we think this could continue for some time, as investors around the globe continue to seek the relative safe haven of U.S. Treasuries.
• The S&P 500 was relatively flat for the second week in a row, gaining just 0.06 percent. The energy sector continued its rally from the prior week with an increase of 2.2 percent. This performance was backed by a 9-percent rebound in WTI crude oil prices, which moved to $48.52 per barrel. The increase came after comments from Russia’s energy minister about successful talks with Saudi Arabia to attain market stability. The Nasdaq Composite Index also moved slightly higher by 0.16 percent.
• The economic news last week was mixed. The week began with soft inflation data, as the Consumer Price Index remained relatively unchanged in July, showing a nominal 0.1-percent increase in core prices. Increases in medical care and housing costs tried to push the index higher, but energy prices and food costs pulled down the final value. On the other hand, Industrial Production increased 0.7 percent, led by improvements in mining segments.

Source: Bloomberg

Source: Morningstar Direct

What to look forward to
We will focus on housing at the beginning of this week, with releases of New and Existing Home Sales, which are both expected to have slowed down in July.

We will also see the release of July Durable Goods Orders data and the second estimate of second-quarter Gross Domestic Product (GDP) growth.

Disclosures: Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. All indices are unmanaged and are not available for direct investment by the public. Past performance is not indicative of future results. The S&P 500 is based on the average performance of the 500 industrial stocks monitored by Standard & Poor’s. The Nasdaq Composite Index measures the performance of all issues listed in the Nasdaq Stock Market, except for rights, warrants, units, and convertible debentures. The Dow Jones Industrial Average is computed by summing the prices of the stocks of 30 large companies and then dividing that total by an adjusted value, one which has been adjusted over the years to account for the effects of stock splits on the prices of the 30 companies. Dividends are reinvested to reflect the actual performance of the underlying securities. The MSCI EAFE Index is a float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a market capitalization-weighted index composed of companies representative of the market structure of 26 emerging market countries in Europe, Latin America, and the Pacific Basin. The Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000® Index. The Barclays Capital Aggregate Bond Index is an unmanaged market value-weighted performance benchmark for investment-grade fixed-rate debt issues, including government, corporate, asset-backed, and mortgage-backed securities with maturities of at least one year. The U.S. Treasury Index is based on the auctions of U.S. Treasury bills, or on the U.S. Treasury’s daily yield curve. The Barclays Capital Mortgage-Backed Securities (MBS) Index is an unmanaged market value-weighted index of 15- and 30-year fixed-rate securities backed by mortgage pools of the Government National Mortgage Association (GNMA), Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (FHLMC), and balloon mortgages with fixed-rate coupons. The Barclays Capital Municipal Bond Index includes investment-grade, tax-exempt, and fixed-rate bonds with long-term maturities (greater than 2 years) selected from issues larger than $50 million.

Mark Gallagher is a financial advisor located at Gallagher Financial Services at 2586 East 7th Ave. Suite #304, North Saint Paul, MN 55109. He offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adv

Authored by the Investment Research team at Commonwealth Financial Network.

© 2016 Commonwealth Financial Network®

Presented by Mark Gallagher

General market news
• The 10-year Treasury yield opened at 1.50 percent early this Monday morning after starting last week at 1.59 percent, which seems to be its upper range. The weak retail sales report on Friday, coupled with slightly high yields, appears to have brought investors back to safety.
• The S&P 500 Index remained relatively flat, with a gain of just 0.12 percent for the week. The best-performing sector was energy, which saw a 1.5-percent increase, while financials, health care, and materials posted negative returns. The positive move in energy was backed up by a rebound in oil prices after Saudi Arabia’s top energy official stated that producers may be taking steps to stabilize prices of the commodity. Meanwhile, the Nasdaq Composite Index moved slightly higher, returning 0.24 percent on the week.
• Last week’s economic data was mostly soft. The Producer Price Index saw a 0.4-percent decrease from June to July. Retail sales also came in lower than expected, remaining flat month-over-month. Other news included an increase in job openings in June and a drop in productivity rates during the second quarter. Import prices increased by 0.1 percent in July, a stat the Federal Reserve will likely consider as it looks for signs of inflation.

Source: Bloomberg

Source: Morningstar Direct

What to look forward to
This week, we turn our attention to the Consumer Price Index, which is expected to have been flat at the headline level in July.

We will also see data on Industrial Production, as well as the Philadelphia Fed Business Outlook Survey.

Disclosures: Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. All indices are unmanaged and are not available for direct investment by the public. Past performance is not indicative of future results. The S&P 500 is based on the average performance of the 500 industrial stocks monitored by Standard & Poor’s. The Nasdaq Composite Index measures the performance of all issues listed in the Nasdaq Stock Market, except for rights, warrants, units, and convertible debentures. The Dow Jones Industrial Average is computed by summing the prices of the stocks of 30 large companies and then dividing that total by an adjusted value, one which has been adjusted over the years to account for the effects of stock splits on the prices of the 30 companies. Dividends are reinvested to reflect the actual performance of the underlying securities. The MSCI EAFE Index is a float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a market capitalization-weighted index composed of companies representative of the market structure of 26 emerging market countries in Europe, Latin America, and the Pacific Basin. The Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000® Index. The Barclays Capital Aggregate Bond Index is an unmanaged market value-weighted performance benchmark for investment-grade fixed-rate debt issues, including government, corporate, asset-backed, and mortgage-backed securities with maturities of at least one year. The U.S. Treasury Index is based on the auctions of U.S. Treasury bills, or on the U.S. Treasury’s daily yield curve. The Barclays Capital Mortgage-Backed Securities (MBS) Index is an unmanaged market value-weighted index of 15- and 30-year fixed-rate securities backed by mortgage pools of the Government National Mortgage Association (GNMA), Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (FHLMC), and balloon mortgages with fixed-rate coupons. The Barclays Capital Municipal Bond Index includes investment-grade, tax-exempt, and fixed-rate bonds with long-term maturities (greater than 2 years) selected from issues larger than $50 million.
Mark Gallagher is a financial advisor located at Gallagher Financial Services at 2586 East 7th Ave. Suite #304, North Saint Paul, MN 55109. He offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. He can be reached at 651-774-8759 or at mark@markgallagher.com.

Authored by the Investment Research team at Commonwealth Financial Network.

© 2016 Commonwealth Financial Network®

Presented by Mark Gallagher

General market news
• The 10-year Treasury yield opened at 1.59 percent early Monday morning, after starting last week at 1.45 percent. The decent unemployment numbers released on Friday account for much of the move higher. The 30-year yield opened at 2.30 percent, up from 2.18 percent last Monday, and the 2-year yield at 0.73 percent, 8 basis points higher than last week.
• Led by the technology and financial sectors, the S&P 500 Index posted modest gains, ticking up 0.49 percent last week. Both JPMorgan Chase and Bank of America gained more than 3 percent on the week. The Nasdaq Composite Index continued its push higher, returning 1.21 percent after Symantec, Activision Blizzard, and Priceline beat earnings estimates.
• Last week’s economic data offered mixed results. On the positive side, the unemployment rate held steady at 4.9 percent, nonfarm payrolls were up by 255,000, and personal spending and income increased. Although the ISM Manufacturing Index dropped slightly due to continued sluggish activity from the factory sector, the employment situation looks to be improving, as average hourly wages grew by 0.3 percent.

Source: Bloomberg

Source: Morningstar Direct

What to look forward to
The focus this week will be on producer-level inflation data, with the release of the Producer Price Index.

We will also see Retail Sales data for July and preliminary readings of Consumer Confidence for August.

Disclosures: Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. All indices are unmanaged and are not available for direct investment by the public. Past performance is not indicative of future results. The S&P 500 is based on the average performance of the 500 industrial stocks monitored by Standard & Poor’s. The Nasdaq Composite Index measures the performance of all issues listed in the Nasdaq Stock Market, except for rights, warrants, units, and convertible debentures. The Dow Jones Industrial Average is computed by summing the prices of the stocks of 30 large companies and then dividing that total by an adjusted value, one which has been adjusted over the years to account for the effects of stock splits on the prices of the 30 companies. Dividends are reinvested to reflect the actual performance of the underlying securities. The MSCI EAFE Index is a float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a market capitalization-weighted index composed of companies representative of the market structure of 26 emerging market countries in Europe, Latin America, and the Pacific Basin. The Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000® Index. The Barclays Capital Aggregate Bond Index is an unmanaged market value-weighted performance benchmark for investment-grade fixed-rate debt issues, including government, corporate, asset-backed, and mortgage-backed securities with maturities of at least one year. The U.S. Treasury Index is based on the auctions of U.S. Treasury bills, or on the U.S. Treasury’s daily yield curve. The Barclays Capital Mortgage-Backed Securities (MBS) Index is an unmanaged market value-weighted index of 15- and 30-year fixed-rate securities backed by mortgage pools of the Government National Mortgage Association (GNMA), Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (FHLMC), and balloon mortgages with fixed-rate coupons. The Barclays Capital Municipal Bond Index includes investment-grade, tax-exempt, and fixed-rate bonds with long-term maturities (greater than 2 years) selected from issues larger than $50 million.
Mark Gallagher is a financial advisor located at Gallagher Financial Services at 2586 East 7th Ave. Suite #304, North Saint Paul, MN 55109. He offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. He can be reached at 651-774-8759 or at mark@markgallagher.com.

Authored by the Investment Research team at Commonwealth Financial Network.

© 2016 Commonwealth Financial Network®