Presented by Mark Gallagher

General Market News
• We saw mild flattening of the yield curve last week as longer-dated yields declined. Despite positive economic data, the drop occurred as foreign buyers, particularly from Japan, purchased bonds and drove yields down. The 10-year Treasury yield remained flat, opening the week at 1.66 percent and closing 9 basis points (bps) lower at 1.57 percent. The 10-year opened just shy of 1.61 percent on the 19th, eroding part of last week’s move. The 30-year opened at 2.29 percent, down roughly 5 bps from last week’s open. On the shorter end of the curve, the 2-year Treasury opened at 0.16 percent, increasing just two-tenths of a basis point.
• Last week was the first week of earnings season, and several large banks, including JPMorgan, Wells Fargo, and Goldman Sachs, kicked it off with reports on Wednesday. Despite significant earnings surprises from each, financials fell near the middle of the pack for weekly sector performance. The decline in rates supported growth in the health care, technology, and consumer discretionary sectors. The worst-performing sectors included communication services, energy, and industrials.
• On Tuesday, the Consumer Price Index report for March was released. Consumer prices rose 0.6 percent, higher than economist estimates for a 0.5 percent increase. This brought year-over-year growth in consumer prices to 2.6 percent, which was also slightly above economist estimates for a 2.5 percent increase. Part of this was due to gas prices rising 9.1 percent in March. Core consumer prices, which strip out the impact of volatile food and energy prices, increased 0.3 percent during the month and 1.6 percent year-over-year. Inflation remained muted throughout much of last year—due in large part to the deflationary pressures created by the pandemic—but we’ve seen an increase in inflationary pressure as the economic recovery has accelerated.
• Thursday saw the release of the March retail sales report. Retail sales grew by 9.8 percent, surpassing economist estimates for a more modest 5.8 percent increase. This result, which followed February’s weather-driven decline in sales, was an encouraging development and signaled continued high levels of consumer demand. It was also the second-highest level of monthly sales growth on record. Sales growth was widespread, as the core retail sales figure that strips out the impact of volatile auto and gas sales rose by a strong 8.2 percent against forecasts for a 6.4 percent increase. Sales growth was supported by a return to more normal weather in March and another round of federal stimulus checks. Consumer spending at bars and restaurants showed solid improvement during the month, likely due to the easing of state and local restrictions that allowed more in-person dining. Overall, this was a very strong report that bodes well for the pace of the economic recovery during the month and quarter.
• Thursday also saw the release of the National Association of Home Builders Housing Market Index for April. This gauge of home builder sentiment increased from 82 in March to 83, which was in line with economist estimates. The index rebounded swiftly after hitting a lockdown-induced low of 30 last April, as low mortgage rates and shifting home buyer preferences fueled a rally for the housing sector over the past year. The improvement in April was driven by continued high levels of home buyer demand, and the report’s measure of prospective home buyer foot traffic hit its highest point since November. The continued strong prospective home buyer demand is encouraging, as mortgage rates have started to increase following a year at or near record lows. Looking forward, home builders remain confident they will be able to sell newly built units due to a shortage of available homes for sale, but rising lumber and construction costs may serve as a headwind for significantly higher levels of home builder confidence.
• On Friday, March’s building permits and housing starts reports were released. These two measures of new home construction rebounded after weather-related declines in February. Building permits rose 2.7 percent against forecasts for a 1.7 percent increase. Housing starts soared 19.4 percent, which was much better than economist estimates for a 13.5 percent increase. This brought the pace of housing starts to its highest level since 2006. Although starts and permits have been volatile on a month-to-month basis, both have rebounded well since initial lockdowns were lifted last year. High levels of home builder confidence and low levels of available homes have helped spur a surge in new home construction over the past year, with single-family housing starts seeing a significant increase over that period. Overall, this encouraging report revealed that home builders are increasing construction despite the headwinds created by rising lumber prices and mortgage rates during the month.
• We finished the week with Friday’s release of the preliminary estimate of the University of Michigan consumer sentiment survey for April. This widely followed measure of consumer confidence increased from 84.9 in March to 86.5, against forecasts for a further increase to 89. This marks two consecutive months with improving confidence, bringing the index to its highest level since the start of the pandemic. The most recent round of federal stimulus payments and accelerating job growth likely contributed to the improved consumer sentiment in April. The gauge of current economic conditions rose to a new post-pandemic high to start the month, while expectations for the future remained unchanged. Despite the miss against forecasts, this was a positive report, as improving consumer confidence has historically supported faster consumer spending growth. There is still real work to be done to return the index to its pre-pandemic high of 101 in February 2020, but we are heading in the right direction, and further improvements are expected as long as we continue to make progress on the mass vaccination and public health fronts.

Source: Bloomberg, as of April 16, 2021

Source: Morningstar Direct, as of April 16, 2021

What to Look Forward To
On Thursday, the initial jobless claims report for the week ending April 17 will be released. Economists expect to see 625,000 initial unemployment claims filed during the week, an increase from the 576,000 initial claims made the week before. Even with the anticipated rise in weekly claims, this report would represent the second-lowest number of initial claims since the start of the pandemic. It would also bring the four-week moving average of claims to a new post-lockdown low. Despite the progress in reducing the number of weekly initial claims, however, work remains to return to pre-pandemic levels. For reference, in 2019 we saw an average of 218,000 weekly initial claims throughout the year. Given the relatively high level of weekly initial jobless claims, this report will continue to be widely monitored.

Thursday will also see the release of the March existing home sales report. Sales of existing homes are expected to decline 0.3 percent, following a 6.6 percent decline in February. Despite the anticipated decline, the pace of existing home sales has increased notably over the past year. If estimates prove accurate, existing home sales in March would be up 15.9 percent year-over-year. Home sales have been buoyed by low mortgage rates and shifting home buyer preferences due to the pandemic. Looking forward, a low supply of existing homes for sale, rising prices, and rising mortgage rates are expected to serve as headwinds for significantly faster sales growth. With that said, sales near current levels would represent a marked increase from the pre-pandemic pace of home sales, signaling continued high levels of home buyer demand.

On Friday, the March new home sales report is set to be released. The pace of new home sales is expected to increase 12.9 percent. (In February, an 18.2 percent decline in new home sales reduced the pace to a nine-month low.) Compared with existing home sales, new home sales are a smaller and often more volatile component of total sales. If estimates hold, the pace of existing home sales would be up 42.9 percent year-over-year. Home builders have increased the pace of construction over the past year to meet rising demand. In addition, newly constructed units have been quick to sell since initial lockdowns were lifted last year. Ultimately, this report is expected to show continued high levels of home buyer demand, representing another sign the housing market remains strong.

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.
© 2020 Commonwealth Financial Network®

Presented by Mark Gallagher

Solid Month Caps Positive Quarter for Markets
U.S. stock markets saw gains for the month and quarter, but not all stocks did well. Higher interest rates led to some volatility, especially for growth and technology companies. The Nasdaq Composite gained 0.48 percent during March, with the heavy technology weighting dragging down the index’s performance. The S&P 500 and Dow Jones Industrial Average (DJIA) saw stronger results, up by 4.38 percent and 6.78 percent, respectively. On a quarterly basis, the Nasdaq Composite gained 2.95 percent, and the S&P 500 managed a 6.18 percent gain. The DJIA led the way with an 8.29 percent return.

These positive results coincided with better-than-expected earnings growth. According to Bloomberg Intelligence, as of March 30 with 99 percent of companies having reported, fourth-quarter earnings for the S&P 500 were up by 5.8 percent. This result is much better than analysts’ initial expectations for an 8.8 percent drop. It marks the first quarter with earnings growth since the fourth quarter of 2019. Analysts are currently forecasting continued earnings growth for U.S. companies throughout the rest of the year.

Technical factors were also supportive for markets. Despite some volatility along the way, all three major indices remained well above their 200-day moving averages. This marks three straight quarters where the indices finished above their respective trend lines. The 200-day moving average is an important technical indicator. Prolonged breaks above or below this level can signal a shift in investor sentiment for an index.

International markets had a similar month and quarter, with riskier assets seeing more volatility. The MSCI EAFE Index increased by 2.30 percent during the month and 3.48 percent during the quarter. The MSCI Emerging Markets Index declined by 1.49 percent in March but managed a 2.34 percent return for the quarter. Both international indices were supported technically during the month and quarter, remaining well above their respective 200-day moving averages throughout the entire period.

Fixed income markets had a more challenging time, driven by rising long-term interest rates. The 10-year Treasury yield ended the month at 1.74 percent, up from 1.45 percent at the start of the month and 0.93 percent at the start of the quarter. Long-term rates rose throughout the quarter due to increased expectations for growth and inflation as the economic recovery continues. The Bloomberg Barclays U.S. Aggregate Bond Index fell by 1.25 percent during the month. This contributed to a 3.37 percent decline for the index during the quarter.

High-yield fixed income, which is less tied to interest rates and more aligned with equity markets, saw more positive results. The Bloomberg Barclays U.S. Corporate High Yield Index gained 0.15 percent during the month and 0.85 percent during the quarter. High-yield spreads continued to compress, ending the month at their lowest level since the start of the pandemic.

Medical Risks Back in Play
We saw the end of the pandemic’s third wave during the first quarter of the year, but case counts started to creep up in March. Although case growth is lower than it was during the past few months and vaccinations are likely to constrain further growth, the combination of the economy reopening and the spread of more contagious variants of the virus has increased risks again. Testing also raised concerns. The number of tests fell and the positive test rate increased, which indicates we have less visibility into the current spread of COVID-19.

Despite the rise in short-term risks, longer-term risks remain constrained with vaccination efforts improving in March. We finished the month with 16 percent of the population fully vaccinated and an impressive 29 percent of the population having received at least one dose. The average number of daily vaccinations increased notably throughout the month. This was due to greater supply and improved processes at the state and local levels. Looking forward, vaccinations are expected to bring the virus largely under control over the next several months. While we are not yet out of the woods yet—and people need to remain cautious until we get there—we are moving in the right direction.

Economic Improvement Continues
Despite the rise in medical risks during the month, the economic data continued to improve. March’s jobs report showed that 916,000 jobs were added during the month, up sharply from February’s 379,000 and well above expectations. Much of the job gains were concentrated in the leisure and hospitality sectors, which have been hit hardest by the pandemic. We also saw a noted decline in the average number of weekly unemployment claims in March. These results indicate that the reopening of many states has started to accelerate the labor market recovery.

Consumers have noted the improved public health and economic conditions during the quarter. As you can see in Figure 1, the Conference Board Consumer Confidence Index hit a new post-lockdown high in March. This indicates consumers are starting to see a light at the end of the tunnel. While there is still work to be done to get back to pre-pandemic levels, the improvements in March are a positive signal for the pace of the economic recovery.

Figure 1. Conference Board Consumer Confidence, 2011–Present

Consumer spending did see a dip in February. It was largely due to the inclement winter weather during the month, however, as well as the fading impact from the December stimulus package. With a return to more normal weather in March and the tailwinds from increased hiring and confidence—as well as another round of federal stimulus checks—we should see spending recover.

Business confidence and spending also showed signs of potential faster growth. Manufacturer confidence finished the month at its highest level since 1983 due to strong buyer demand and low business inventory. As was the case with consumer spending, business spending saw a modest weather-related decline in February. Given the high levels of confidence and the boost from the recent stimulus bill, however, we can expect to see a swift return to business spending growth reflected in upcoming data reports.

The Progress Is Real, but Risks Remain
We made real progress with vaccinations and the economy during the month. But even so, the rising case counts toward month-end served as a reminder that the medical risks are still out there. The potential for more infectious strains to cause faster case growth on a national level is a risk we need to keep an eye on.

Economically, risks have diminished with the recovery in hiring and confidence. The passage of the most recent stimulus bill in March will also help support spending. While the medical risks may worsen in the short term, the economy looks to have enough momentum to ride them out until the pandemic is brought under full control.

There is still uncertainty surrounding the pace and path of the expected recovery, and that could lead to more market volatility. A well-diversified portfolio that matches investor goals and timelines represents the best path forward for most. If concerns remain, contact your financial advisor to discuss your financial plan.

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 the Investment Research team at Commonwealth Financial Network.
© 2020 Commonwealth Financial Network®

Presented by Mark Gallagher

General Market News
• Rates increased modestly last week. The 10-year Treasury yield opened at 1.67 percent and closed at 1.71 percent. On Monday morning, the 30-year opened at 2.35 percent, down from last week’s open of 2.38 percent. On the shorter end of the curve, the 2-year opened last week at 0.14 percent and increased to 0.18 percent on Monday.
• The Nasdaq Composite led the way last week. Communication services, consumer discretionary, and technology were among the top-performing sectors, as there was a slight reversing of the recovery trade that has been in place since the news of the Pfizer vaccine in November. Both Facebook and Alphabet were up more than 5 percent on the week. In consumer discretionary, Amazon was up more than 3.6 percent. The worst-performing sectors were consumer staples, health care, and energy. Markets seem optimistic about vaccine rollouts and Friday’s strong jobs report. The switch from energy, industrials, and financials back to communication services, consumer discretionary, and technology is a trade worth watching to see if it gains momentum.
• On Monday, the February existing home sales report was released. The pace of existing home sales fell by 6.6 percent against forecasts for a more modest 3 percent decline. This drop was likely due in large part to the inclement weather during the month. On a year-over-year basis, however, existing home sales are up by 9.1 percent, highlighting the rebound we’ve seen since initial lockdowns were lifted last year. The increase in the pace of existing home sales over the past year has been largely driven by record-low mortgage rates and shifting home buyer preferences due to the pandemic. Looking forward, low levels of supply and rising mortgage rates and prices may serve as a headwind for significantly faster levels of existing home sales.
• On Tuesday, the Conference Board Consumer Confidence survey for March was released. Consumer confidence came in well above economist expectations, with the index rising from 90.4 in February to 109.7 in March against forecasts for a more modest increase to 96.9. This result echoed a similar surge in the University of Michigan consumer sentiment survey for the month and brought the index to its highest level in a year. March’s results were driven by improved consumer views on the current economic situation, as well as heightened expectations for future growth. The continued vaccination progress and the tailwind from the most recent federal stimulus were likely the major drivers of the better-than-expected result. The report also showed signs that there is pent-up consumer demand, as the percentage of consumers who are planning to buy big-ticket items like houses, cars, and appliances in the next six months hit a multi-month high in February. Ultimately, this was an encouraging report that supports a potential rebound in consumer spending growth.
• On Thursday, the Institute for Supply Management (ISM) Manufacturing index for March was released. This widely followed gauge of manufacturer confidence rose from 60.8 in February to 64.7 in March against calls for a more modest increase to 61.5. This result brought the index to its highest level since 1983. This is a diffusion index, where values above 50 indicate growth, so this strong result bodes well for increased manufacturing output and spending over the upcoming months. Business confidence and spending have remained impressively resilient throughout the year, as the improving public health situation along with the multiple stimulus bills have helped support continued growth.

Source: Bloomberg, as of April 2, 2021

Source: Morningstar Direct, as of April 2, 2021

What to Look Forward To
On Monday, the ISM Services index for March was released. As was the case with manufacturer confidence, service sector confidence surged well past economist expectations during the month. The index rose from 55.3 in February to 63.7 in March, against calls for a more modest increase to 59. This result brought the index to its highest level since records began back in 1997. This swift rebound following a weather-related slump in February signals that reduced state and local restrictions helped spur a surge in business confidence going into the spring. The rise in confidence was supported by a strong increase in new orders for the service sector, highlighting strong levels of buyer demand. This is a diffusion index, where values above 50 indicate expansion, so this strong result is a good sign for business spending to finish out the quarter. Given the progress on the mass vaccination front and the anticipated tailwind from the recent federal stimulus bill, business confidence and spending are expected to remain in healthy expansionary territory over upcoming months.

On Wednesday, the February international trade report is set to be released. The trade deficit is expected to widen from $68.2 billion in January to $70.4 billion in February. The advance report on the trade of goods showed that both exports and imports declined during the month, as the February weather negatively affected manufacturing and trade. Exports of goods fell by 3.8 percent, an amount more than enough to offset a 1.4 percent decline in imports. If estimates hold, this report would bring the trade deficit to its largest monthly level on record. Despite the notable widening of the trade deficit throughout the pandemic, exports and imports are expected to return to growth in March. The moderating weather and improvements we’ve seen in manufacturing confidence and consumer demand during the month should support this growth. Nonetheless, trade is expected to serve as a modest headwind for overall economic growth during the first quarter.

Wednesday will also see the release of the minutes from the Federal Reserve’s (Fed’s) March meeting. The Fed lowered the federal funds rate to virtually zero last March, and there were no major changes to interest rates at this meeting, as expected. Still, although no major surprises were announced, the minutes will likely provide details regarding the Fed’s views on the current economic recovery and the potential path of future rate hikes. The majority of Fed members do not expect to see any interest rate hikes until at least 2023, but the minutes will let us know if any members are in favor of a potential earlier rate hike. The minutes should contain some discussion regarding the rise in long-term interest rates we’ve seen recently. While most Fed members have characterized the increase in long-term yields as reflecting a strengthening economic outlook, the minutes could show us if any Fed members are concerned about the recent rise in interest rates.

On Thursday, the initial jobless claims report for the week ending April 3 will be released. Economists expect to see the number of initial weekly unemployment claims fall from 719,000 to 685,000. If estimates hold, this report would bring the four-week moving average for initial claims to a new post-pandemic low, indicating continued progress for the labor market recovery. The recent improvement in the pace of weekly layoffs is due in large part to the continued easing of state and local restrictions, which has helped spur economic activity as we head into spring. Given the continued progress on the mass vaccination front and the anticipated tailwind from the recent federal stimulus bill, we may be in store for further improvements in the pace of initial weekly layoffs. Still, although we have made progress in reducing the number of initial claims compared with the peak of the pandemic, claims remain high on a historical basis. Accordingly, this report will continue to be widely monitored.

On Friday, the March Producer Price Index is set to be released. Producer prices are expected to rise by 0.5 percent during the month, in line with February’s 0.5 percent increase. Core producer prices, which strip out the impact of volatile food and energy prices, are expected to rise by a more modest 0.2 percent, matching their 0.2 percent rise in February. On a year-over-year basis, headline producer inflation is expected to rise to 3.8 percent in March, marking the fastest pace of producer inflation since 2011. Much of the recent increase in producer prices has been due to rising input costs for producers. The Fed will continue to closely monitor various inflation metrics. Based on comments from the Fed’s March meeting, however, Fed members appear willing to let inflation run hot for the time being to support the ongoing economic recovery.

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. Basis points (bps) is a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th of 1 percent, or 0.01 percent.

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.
© 2020 Commonwealth Financial Network®