Presented by Mark Gallagher

General Market News
• Rates dropped after the Federal Open Market Committee (FOMC) meeting last week. The 10-year Treasury yield dropped from 2.11 percent at the start of the week to below 2 percent after the meeting. On Monday, it opened at 2.02 percent. The 2-year and 30-year yields stand at 2.74 percent and 2.54 percent, respectively.
• The perceived dovish tone from the FOMC meeting was one of the main drivers in stocks last week. Although the committee left rates unchanged, investors flocked to riskier assets, as the word patient was removed from the stated approach to future potential rate cuts. Another driver of trade was news of heightened tensions between the U.S. and Iran, with Iran claiming responsibility for shooting down an American drone over the Strait of Hormuz on Thursday.
• The energy, technology, and industrials sectors were last week’s top performers. Oil drove the rally in energy. The strength in technology was supported by the launch of Facebook’s cryptocurrency, Libra, as well as strong operating numbers from Oracle and Adobe. Consumer staples, materials, and financials were underperformers.
• On Monday, the National Association of Home Builders Housing Market Index for May fell from 66 to 64, against expectations for a modest increase to 67. This unexpected decline was due to dropping sentiment in the northeastern and western regions, which was likely weather related. While this decline was disappointing, the index still sits well above lows seen in December and January, so there is no immediate cause for concern.
• On Tuesday, May’s housing starts and building permits reports were released. These results were mixed, with starts declining by 0.9 percent and permits increasing by 0.3 percent. Economists had forecast modest growth for both figures, but housing starts surged by 5.7 percent in April, so the pullback in May is understandable.
• The week ended with the release of May’s existing home sales figure on Friday. Existing home sales increased by 2.5 percent during the month, which beat expectations for 2.1 percent growth. Given the decline in home builder confidence during this same period, the growth in sales is very encouraging.

Source: Bloomberg

Source: Morningstar Direct

What to Look Forward To
Tuesday will see the release of May’s new home sales report. Economists expect sales to grow by 2.2 percent month-over-month, which would be in line with the growth in existing home sales we saw last month. If we do see this modest growth, it would bring new home sales to its second-highest level in the past 12 months, nearing postrecession highs.

Tuesday will also see the release of the Conference Board consumer confidence survey. It is expected to decline slightly from 134.1 to 131 in June. Despite this expected pullback, consumer confidence remains near multiyear highs, as a healthy job market and a rebound in U.S. equities supported confidence during the month.

On Wednesday, we will receive the first report for May’s durable goods orders. Headline orders are expected to decline by 0.2 percent, primarily driven by a decline in transportation orders. There is further downside risk here, as the impact from the ongoing grounding of the Boeing 737 MAX could lead to even steeper declines in headline orders. Core orders, which strip out volatile transportation figures, are expected to show modest 0.2 percent growth.

On Friday, May’s personal income and personal spending reports are both set to be released. Income is expected to grow by 0.3 percent, while spending is set to increase by 0.5 percent. This would follow similar growth figures from April. Consumer spending is the backbone of the economy, so this continued steady growth in consumers’ ability and willingness to spend is very encouraging.

Finally, we finish the week with the second and final release of the University of Michigan Consumer Sentiment Index for June. It is expected to decline slightly from 97.9 to 97.7. Similar to the Conference Board measure of confidence, this index remains near postrecession highs, so this slight pullback is nothing to worry about.

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 Bloomberg Barclays US 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 Bloomberg Barclays US 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 Bloomberg Barclays US Municipal 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.

© 2019 Commonwealth Financial Network ®

Presented by Mark Gallagher

General Market News
• Last week, the 10-year Treasury yield dropped as low as 2.05 percent, and it opened at 2.10 percent on Monday morning. Most of the curve remains inverted, with the 3-year, 2-year, and 5-year yields coming in at 1.81 percent, 1.87 percent, and 1.86 percent, respectively.
• U.S. markets were up slightly last week, putting an end to the downward streak of the four weeks prior. Possible drivers were the suspension of tariffs on Mexico and news of constructive trade talks between U.S. Treasury Secretary Steven Mnuchin and People’s Bank of China Governor Yi Gang.
• Last week saw a rebound in the communication services sector, which took a beating recently over looming FTC investigations. Facebook was up more than 4 percent. The weakest-performing sector was energy, which sold off as crude oil hit its highest level since July 2017.
• The week began with Tuesday’s release of the Producer Price Index for May. Producer inflation rose by 0.1 percent during the month, which lowered the year-over-year inflation rate to 1.8 percent, down from 2.2 percent in April.
• On Wednesday, the May Consumer Price Index was released. Consumer prices rose by 0.1 percent, leaving year-over-year inflation at 1.8 percent. These two popular measures of inflation are now firmly below the Federal Reserve’s (Fed’s) stated 2 percent inflation target, so this slowdown is another reason the Fed is not expected to hike rates.
• On Friday, May’s industrial production report was released. Production increased by 0.4 percent during the month, which was better than economist expectations for 0.2 percent growth. This result was primarily driven by increased utilities output.
• Also on Friday, the University of Michigan Consumer Sentiment Index declined slightly, from 100 to 97.8, as expected. This measure of consumer confidence still sits near 15-year highs, so this pullback, while worth watching, is not an immediate concern.
• Finally, we ended the week with the release of May’s retail sales, which showed a strong rebound after a weak April. Retail sales grew by 0.5 percent in May, and the disappointing 0.2 percent loss in April was revised up to show 0.3 percent growth during the month. This was a very positive result for the economy, given the importance of consumer spending on overall growth. With confidence high and consumers spending, solid economic growth in the second quarter remains likely.

Source: Bloomberg

Source: Morningstar Direct

What to Look Forward To
This week is off to a rocky start with the release of May’s National Association of Home Builders Housing Market Index. This gauge of home builder optimism was expected to increase from 66 to 67, which would have been a nine-month high. Instead, the index dropped to 64, due to declines in sentiment in the northeastern and western regions. While this result is disappointing, the index still sits well above the lows seen in December and January, so there is no immediate cause for concern.

On Tuesday, May’s housing starts and building permits data is set to be released. Both measures of new home construction are expected to show mild growth. Despite a slight rebound in April, the supply of homes for sale remains well below late-2018 levels, so a positive surprise here would be welcome.

The Federal Open Market Committee is meeting this week and will be releasing its rate decision on Wednesday. Market participants widely expect the Fed to keep rates steady and are looking ahead to the July and September meetings for potential rate cuts.

We will finish the week with the release of May’s existing home sales data on Friday. Sales are expected to show 2.1 percent growth, following a decline in April. Falling rates have led to a surge in mortgage applications, so growth in housing sales should follow.

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 Bloomberg Barclays US 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 Bloomberg Barclays US 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 Bloomberg Barclays US Municipal 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.

© 2019 Commonwealth Financial Network ®

Presented by Mark Gallagher

Markets hit turbulence in May
After four months of rising stock markets, we finally saw a decline in May. All three major U.S. markets ended the month down, driven by rising worries about a trade war. The S&P 500 declined by 6.35 percent during the month, the Nasdaq Composite lost 7.79 percent, and the Dow Jones Industrial Average fell by 6.32 percent. Of course, this pullback is a concern. But in the bigger picture, it has taken markets back only to mid-March levels. They are still well above where we started the year, so there is no need to panic yet.

The pullback was due to declining confidence, as fundamentals improved during the month. According to FactSet (as of May 24, 2019), with 97 percent of companies reporting, the first-quarter blended earnings growth rate for the S&P 500 stands at –0.4 percent. If this number comes in as expected, it would be the first quarter of year-over-year earnings declines since the second quarter of 2016. On first glance, this may seem like bad news. But it is much better than the 4 percent drop forecast on March 31, or even the 2.3 percent drop expected at the start of May. Plus, analysts expect earnings growth to be positive for the rest of the year. This growth should help bolster equity performance going forward.

Although fundamentals were supportive during the month, technical factors were another story. All three major U.S. indices ended May below their respective 200-day moving averages. In fact, the S&P 500 and Nasdaq dropped below the trend line on the last day of the month. This drop is a warning signal for U.S. markets. A prolonged dip below the 200-day moving average can indicate deteriorating investor sentiment and serve as a headwind for future performance.

The international story was much the same, as global trade concerns affected markets across the world. The MSCI EAFE Index fell by 4.80 percent during the month, and the MSCI Emerging Markets Index declined by 7.22 percent. Here again, technical factors were not supportive. Both indices spent most of May below their respective trend lines.

This was an especially disappointing month for developed international markets. The MSCI EAFE Index spent April above its 200-day moving average. This marked the first full month above the trend line for the index in more than a year. But the move below the trend line in May indicates that investors are still cautious about international investing.

Fixed income markets had a better month than equities. Here, investors rotated away from riskier asset classes and into investment-grade bonds. Yields fell during the month, with the 10-year Treasury falling from 2.52 percent to 2.22 percent. This drop led the Bloomberg Barclays U.S. Aggregate Bond Index to a gain of 1.78 percent in May, as bond values typically increase when rates drop.

High-yield fixed income had a challenging month. This space is less driven by rate movements and more correlated with equities. In May, risk-averse investors favored higher-quality sectors of the fixed income market. The Bloomberg Barclays U.S. Corporate High-Yield Index declined by 1.19 percent during the month.

Economic data a mixed bag
The economic data released in May was a mixed bag. We saw improvements in consumer sentiment and spending. But we also saw lowered business optimism and investment amid concerns over the ongoing trade wars. Despite the varying results, the economy continued to show growth.

Consumers were the major bright spot during the month. Rising confidence led to increased spending. The University of Michigan consumer confidence survey hit a 15-year high at midmonth before moderating at month’s end. Plus, the Conference Board’s measurement of consumer confidence showed better-than-expected improvement.

Solid employment results helped bolster consumer sentiment. The 236,000 new jobs added in April drove the unemployment rate down to a 50-year low of 3.6 percent. Wage growth also remained healthy, with a 3.2 percent year-over-year increase.

Rising consumer confidence led to better-than-expected spending growth. Personal spending rose by 0.3 percent in April. This increase was supported by 0.5 percent growth in personal income over the same period. To be sure, consumer spending is very important to the economy. As such, it will be important to watch whether improvements in confidence can continue to translate into more spending.

Businesses feel weight of the trade wars
Worries over trade wars with China and Mexico drove much of the negative data released in May. Businesses especially began to feel the effect of these continued trade disputes. The Institute for Supply Management (ISM) Manufacturing and Nonmanufacturing indices both fell during the month. As a result, the ISM composite index of business sentiment dropped to its lowest level since October 2016 (see Figure 1).

Figure 1. ISM Composite Index, May 2010–April 2019

Declines in business sentiment were echoed by decreased business investment. Durable goods orders in April fell by 2.1 percent, which was worse than expected. Revisions to March’s orders also showed weakness. The slide in April was due to a decline in aircraft purchases. Industrial production also disappointed. Lowered utility production and a drop in manufacturing led to an overall decline of 0.5 percent.

Net international trade, which was a surprise tailwind for first-quarter growth, reversed course. The trade deficit widened from $49.4 billion to $50 billion in March. This increase was driven by imports increasing faster than exports. Economists expect that this deficit widened further in April, as the escalating U.S.-China trade war likely slowed export growth.

As mentioned, May’s data had mixed results. But the improvement in consumer sentiment and spending is likely to outweigh the concerns around the business sector. Here, it is important to note that consumer spending makes up more than two-thirds of the economy. Despite the trade-related headwinds in the business sector, improvement in spending should help keep growth going.

Economy withstands rising political risks
As we have seen time and again, political risks can have a direct effect on markets. They generate uncertainty and, therefore, short-term volatility. In fact, political risks drove much of the instability across markets in May. Here, the escalation of the U.S.-China trade war and the surprise announcement of a 5 percent tariff on all Mexican goods were the main culprits.

Developments in May gave rise to a heightened level of worry. Now, markets are priced for more bad news. This pricing sets them up for more declines if the trade situation deteriorates. It also creates an opportunity for a recovery if tensions ratchet down. Of course, there is no telling what will happen with trade developments over the next few months. But the fundamentals suggest growth will continue. This growth should help support markets and provide the foundation for a recovery if the trade tensions do resolve.

Big picture remains positive
Last month’s decline reminds us that although market volatility can create pain in the short term, the big picture in the U.S. remains positive. Consumers continue to be confident and willing to spend. These factors should help boost growth throughout the year. Companies are expected to show improving fundamentals. Finally, even with the declines seen in equities, markets are still positive year-to-date and remain well above December lows.

There are risks out there, especially politically. Nonetheless, the U.S. remains economically resilient and continues to show signs of growth. All in all, May was a bad month for markets. But it is quite possible that it was just that—a bad month—and not the beginning of a larger negative trend.

As always, a well-diversified portfolio and a long-term view toward investing remain the best way to meet financial goals in an unpredictable world.

All information according to Bloomberg, unless stated otherwise.

Disclosure: Certain sections of this commentary contain forward-looking statements 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. Past performance is not indicative of future results. Diversification does not assure a profit or protect against loss in declining markets. All indices are unmanaged and investors cannot invest directly into an index. The Dow Jones Industrial Average is a price-weighted average of 30 actively traded blue-chip stocks. The S&P 500 Index is a broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks. 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 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. It excludes closed markets and those shares in otherwise free markets that are not purchasable by foreigners. The Bloomberg Barclays Aggregate Bond Index is an unmanaged market value-weighted index representing securities that are SEC-registered, taxable, and dollar-denominated. It covers the U.S. investment-grade fixed-rate bond market, with index components for a combination of the Bloomberg Barclays government and corporate securities, mortgage-backed pass-through securities, and asset-backed securities. The Bloomberg Barclays U.S. Corporate High Yield Index covers the USD-denominated, non-investment-grade, fixed-rate, taxable corporate bond market. Securities are classified as high-yield if the middle rating of Moody’s, Fitch, and S&P is Ba1/BB+/BB+ or below.

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 Brad McMillan, CFA®, CAIA, MAI, managing principal, chief investment officer, and Sam Millette, fixed income analyst, at Commonwealth Financial Network®.

© 2019 Commonwealth Financial Network ®

Presented by Mark Gallagher

General Market News
• After experiencing steep declines recently, Treasury yields remained in a tight range last week. While yields did reach cycle lows—2.05 percent for the 10-year and 1.73 percent for the 2-year—both rates were up slightly higher on Monday at 2.13 percent and 1.86 percent, respectively. The 30-year opened at 2.61 percent on Monday after being as low as 2.52 percent last week.
• Global markets rebounded with their best week of the year, as Jerome Powell and the Federal Reserve (Fed) stated that they will “act as appropriate to sustain the expansion.” The market continued to rally on Friday after a poor employment report led investors to believe that the Fed will be more inclined to support activity through low rates. In fact, the Fed funds futures are indicating an 80 percent chance of a rate cut at the July meeting. Another potential reason for the rebound last week was oversold conditions.
• Materials, technology, and consumer staples were among the top performers on the week. The technology sector bounced back nearly 6 percent after a strong sell-off, which was due to the House Judiciary Committee’s announcement that it would launch an investigation into the competition in digital markets. The lagging sectors were communication services, utilities, and consumer discretionary, although all of the sectors posted strong gains for the week.
• On Monday, we saw the release of the Institute for Supply Management (ISM) Manufacturing index. This gauge of manufacturer optimism declined from 52.8 in April to 52.1 in May. Economists had expected to see a modest uptick to 53. Although this decline was disappointing, this is a diffusion index, where values greater than 50 represent expansion. So, manufacturers are still expected to show some growth at current levels.
• On Tuesday, the ISM Nonmanufacturing index made up for the disappointing manufacturing results. It rose from 55.5 in April to 56.9 in May. This was a solid improvement in sentiment for the service sector and leaves the index at levels that are typically consistent with 2 percent annualized gross domestic product growth.
• Thursday saw the release of April’s international trade report, which showed a trade deficit of $50.8 billion for the month. This was a slightly larger gap than economists expected. Both imports and exports fell sharply, as increasing trade war-related pressure is starting to show up in the hard data.
• Finally, on Friday, the May employment report was released. Only 75,000 new jobs were added during the month, against expectations for 175,000. Unemployment remained unchanged at 3.6 percent. All in, this was a concerning report, as strong job growth has been a major driver of overall economic growth in the current expansion.

Source: Bloomberg

Source: Morningstar Direct

What to Look Forward To
On Tuesday, the Producer Price Index for May will be released. Economists expect 0.2 percent month-over-month growth. That result should leave the annual producer inflation figure at 2 percent, down from the 2.2 percent rate seen in April.

The Consumer Price Index is set to be released on Wednesday. It is expected to show modest monthly growth of 0.1 percent. The headline measure of consumer inflation is likely to show 1.9 percent year-over-year growth, which is down from April’s level. Inflation growth has slowed over the past few months, and further declines are possible.

On Friday, we will receive May’s industrial production report. Economists expect 0.2 percent growth, following April’s 0.5 percent decline. Much of the drop in April was due to lowered utilities output, which is expected to reverse in May. There may be some risk to the downside here, given the decline we saw in the ISM Manufacturing index.

Also on Friday, the University of Michigan consumer sentiment survey will be released. The index is expected to drop from 100 to 98. Although any decline would be disappointing, the index currently sits near 15-year highs, so this mild pullback would not be a concern.

Finally, we will receive the advance report for May’s retail sales on Friday. Economists expect a strong rebound of 0.7 percent growth in May, following a surprising decline in April. Given the high level of consumer confidence, strong spending growth should follow.

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 Bloomberg Barclays US 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 Bloomberg Barclays US 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 Bloomberg Barclays US Municipal 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.

© 2019 Commonwealth Financial Network ®