Weekly Market Update, March 9, 2015

Posted on March 9, 2015 by Neal Gallagher

Presented by Mark Gallagher

General market news
• The Treasury market sold off with Friday’s strong jobs report. The 10-year yield went as high as 2.25 percent on Friday, but rates came back down early Monday to 2.21 percent. After hitting 2.86 percent on Friday, the 30-year yield started off Monday at 2.81 percent. We can expect continued volatility in the Treasury market as stronger employment numbers battle with low inflation.
• The broader equity markets moved lower last week after four weeks of gains, with major global indices all in the red.
• Large-cap U.S. stocks finished lower, with the S&P 500 losing 1.54 percent. The market sold off sharply on Friday after improved jobs numbers sparked fears that the Federal Reserve may raise rates sooner rather than later.

Equity Index	Week-to-Date	Month-to-Date	Year-to-Date	12-Month
S&P 500	−1.54%	−1.54%	1.00%	12.61%
Nasdaq Composite	−0.70%	−0.70%	4.34%	14.71%
DJIA	−1.50%	−1.50%	0.68%	11.29%
MSCI EAFE	−0.92%	−0.92%	5.58%	−0.59%
MSCI Emerging Markets	−1.54%	−1.54%	2.09%	3.33%
Russell 2000	−1.26%	−1.26%	1.24%	2.41%

Source: Bloomberg

Fixed Income Index	Month-to-Date	Year-to-Date	12-Month
U.S. Broad Market	−0.98%	0.15%	3.95%
U.S. Treasury	−1.10%	−0.11%	3.19%
U.S. Mortgages	−0.52%	16%	4.18%
Municipal Bond	−0.58%	14%	5.76%

Source: Morningstar Direct

What to look forward to
This week will begin with data on Retail Sales, which are expected to show a pickup.

We will then gain insight into producer inflation with the Producer Price Index release, which is also expected to show improvement, with prices forecast to have risen 0.3 percent in February.

The week will end with the release of the University of Michigan Consumer Sentiment 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. The Barclays Capital U.S. Treasury Inflation Protected Securities (TIPS) Index measures the performance of intermediate (1- to 10-year) U.S. TIPS.

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Mark Gallagher is a financial advisor located at Gallagher Financial Services at 2586 East 7th Avenue, 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.

Weekly Market Update, November 24, 2014

Posted on December 1, 2014 by Neal Gallagher

Presented by Mark Gallagher

General market news
• Treasury yields opened the week in the middle of last week’s range. The 10-year started Monday morning at 2.32 percent, after going as low as 2.28 percent and as high as 2.36 percent last week.
• Amid concerns over a global slowdown, with China lowering interest rates and continued central bank support in Europe and Japan, the demand for Treasuries could keep rates low for some time, even as the U.S. economy slowly improves.
• Equity markets continued their move upward, setting all-time highs on the Dow Jones Industrial Average and the S&P 500 Index. After performing poorly last week in the face of lower oil prices, the energy sector rebounded, becoming a major source of strength for the markets.
• With third-quarter earnings season in the rearview mirror, the market may begin to move more in tandem with geopolitical and economic headlines than with fundamentals. Last week, for example, the People’s Bank of China announced surprise interest rate cuts, and the European Central Bank revealed that it would step up its efforts to increase inflation, both of which helped push markets higher. This market environment may lead to heightened volatility going forward.

Equity Index	Week-to-Date %	Month-to-Date %	Year-to-Date %	12-Month %
S&P 500	1.21%	2.45%	13.70%	17.28%
Nasdaq Composite	0.58%	1.94%	14.12%	20.21%
DJIA	1.06%	2.69%	9.73%	13.88%
MSCI EAFE	0.16%	0.05%	−2.14%	0.56%
MSCI Emerging Markets	−0.06%	−2.51%	1.17%	1.29%
Russell 2000	−0.10%	−0.01%	1.88%	6.09%

Source: Bloomberg

Fixed Income Index	Month-to-Date %	Year-to-Date %	12-Month %
U.S. Broad Market	0.17%	5.57%	5.10%
U.S. Treasury	0.25%	5.05%	4.22%
U.S. Mortgages	0.36%	5.59%	4.88%
Municipal Bond	−0.14%	8.85%	8.75%

Source: Bloomberg

What to look forward to
This week will present several important economic releases. Preliminary third-quarter Gross Domestic Product data, expected to come in at 3.3 percent, will be released Tuesday, along with the S&P/Case-Shiller Home Price Index.

Most releases will come on Wednesday, before the holiday, including figures on Durable Goods Orders, which are expected to show some improvement; Personal Income and Outlays, which are expected to increase; and New Home Sales.

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Authored by the Investment Research team at Commonwealth Financial Network.

Weekly Market Update, November 10, 2014

Posted on December 1, 2014 by Neal Gallagher

Presented by Mark Gallagher

General market news
• The 10-year Treasury yield climbed as high as 2.39 percent on Friday before closing below 2.30 percent; it opened early Monday morning as low as 2.27 percent. Last week’s employment report, though positive, came in below expectations, and with global government yields so low (much lower than U.S. yields), investors continued moving assets to Treasuries.
• Despite the sell-off we’ve seen in Treasuries over the last couple of weeks, they remain the best-performing government debt over the last month, as yields on the 10-year moved from north of 2.50 percent to as low as 1.86 percent and now back to 2.27 percent. Money should continue to pour into Treasuries as global investors seek yield on safety assets, with the German 10-year bund yielding 0.804 percent.
• Equities continued to drift higher last week. Large-cap stocks performed well, with the S&P 500 Index and the Dow Jones Industrial Average both closing at record highs, returning 0.77 percent and 1.17 percent, respectively. Small-caps lagged larger-cap indices, as the Russell 2000 Index returned 0.01 percent after strong performance the week before. Internationally, both developed and emerging markets performed poorly, with the MSCI EAFE and MSCI Emerging Markets indices returning −0.64 percent and −2.42 percent, respectively.
• The move higher in U.S. equities was, in part, the result of October’s modest increase in jobs and a decline in the unemployment rate. Renewed worries over slow global growth, as well as increased regulatory scrutiny for banks in the eurozone, contributed to poor international performance.

Equity Index	Week-to-Date %	Month-to-Date %	Year-to-Date %	12-Month %
S&P 500	0.77%	0.77%	11.85%	18.69%
Nasdaq Composite	0.12%	0.12%	12.08%	21.62%
DJIA	1.17%	1.17%	8.10%	15.34%
MSCI EAFE	−0.64%	−0.64%	−2.82%	0.62%
MSCI Emerging Markets	−2.42%	−2.42%	1.26%	0.84%
Russell 2000	0.01%	0.01%	1.91%	10.16%

Source: Bloomberg

Fixed Income Index	Month-to-Date %	Year-to-Date %	12-Month %
U.S. Broad Market	0.07%	5.46%	4.59%
U.S. Treasury	0.14%	4.93%	3.62%
U.S. Mortgages	0.07%	5.28%	4.26%
Municipal Bond	−0.27%	8.70%	8.23%

Source: Bloomberg

What to look forward to
In a light week for economic news, we will see data on Retail Sales, which are expected to improve after a dip in the last reading, and the University of Michigan Consumer Sentiment survey.

Authored by the Investment Research team at Commonwealth Financial Network.

Weekly Market Update, November 3, 2014

Posted on December 1, 2014 by Neal Gallagher

Presented by Mark Gallagher

General market news
• Treasury yields were up initially following the release of last week’s Federal Reserve meeting minutes, which seemed to be more hawkish than anticipated. Reading between the lines, however, the Fed is still concerned with the pace at which the economy is expanding. The 10-year Treasury opened Monday morning at 2.32 percent, in line with where it began last week.
• The Fed ended its quantitative easing (QE) program with no major market movement, an encouraging sign for the time being. The end of QE is still fresh, though, and we will be keeping a close eye on the markets, both equity and fixed income, to see if there is any impact in the weeks to come.
• Equities posted a strong week of performance. Large-cap stocks fared well, with the S&P 500 Index and the Dow Jones Industrial Average returning 2.74 percent and 3.48 percent, respectively. Small-caps were the best-performing asset class, with the Russell 2000 Index returning 4.90 percent on the week.
• Several pieces of good news contributed to last week’s strong equity performance. An unexpected announcement from the Bank of Japan that it would increase its stimulus efforts helped boost equity markets across the globe. In addition, some positive economic data points from the eurozone tempered fears that the area will slip back into recession, and strong corporate earnings supported U.S. equities.

Equity Index	Week-to-Date %	Month-to-Date %	Year-to-Date %	12-Month %
S&P 500	2.74%	2.44%	10.99%	17.26%
Nasdaq Composite	3.30%	3.10%	11.95%	19.65%
DJIA	3.48%	2.16%	6.86%	14.48%
MSCI EAFE	1.13%	−2.50%	−3.28%	−1.02%
MSCI Emerging Markets	2.38%	0.34%	2.91%	0.11%
Russell 2000	4.90%	6.59%	1.90%	8.07%

Source: Bloomberg

Fixed Income Index	Month-to-Date %	Year-to-Date %	12-Month %
U.S. Broad Market	0.99%	5.39%	4.27%
U.S. Treasury	1.09%	4.78%	3.25%
U.S. Mortgages	0.96%	5.21%	3.98%
Municipal Bond	0.61%	8.99%	8.37%

Source: Bloomberg

What to look forward to
This week will feature data on manufacturing activity, with ISM Manufacturing expected to remain fairly solid, as well as Factory Orders. ISM Non-Manufacturing data is expected on Wednesday.

The week will end with the Employment report, which is expected to remain mostly unchanged, with a slight increase in average hourly earnings.

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Authored by the Investment Research team at Commonwealth Financial Network.