Presented by Mark Gallagher

Consumer and producer prices rose more than expected, leading to questions about the potential reacceleration of inflation. In equity markets, technology (paced by Nvidia and Apple) and international stocks led the way. The Treasury yield curve was little changed.

Quick Hits

1. Report releases: Consumer and producer prices rose more than expected.
2. Financial market data: Led by Nvidia and Apple, technology stocks bounced back.
3. Looking ahead: Economic releases this week will focus on housing and the Federal Reserve (Fed).

Keep reading for an in-depth look.

Report Releases—February 10–14, 2025

National Federation of Independent Business (NFIB) Small Business Optimism: January (Monday)
Small business optimism fell 2.3 points as plans for making capital outlays and increasing inventories dropped. Expectations for improvement in the economy also fell, from 52 percent to 47 percent.

• Expected/prior NFIB small business optimism: 104.6/105.1
• Actual NFIB small business optimism: 102.8

Consumer Price Index (CPI): January (Wednesday)
Consumer inflation continued to accelerate, with headline and core prices rising more than expected.

• Prior monthly CPI/core CPI growth: +0.4%/+0.2%
• Expected monthly CPI/core CPI growth: +0.3%/+0.3%
• Actual monthly CPI/core CPI growth: +0.5%/+0.4%
• Prior year-over-year CPI/core CPI growth: +2.9%/+3.2%
• Expected year-over-year CPI/core CPI growth: +2.9%/+3.1%
• Actual year-over-year CPI/core CPI growth: +3.0%/+3.3%

Producer Price Index (PPI): January (Thursday)
Headline and core producer inflation increased more than expected.

• Prior monthly PPI/core PPI growth: +0.2%/+0.0%
• Expected monthly PPI/core PPI growth: +0.3%/+0.3%
• Actual monthly PPI/core PPI growth: +0.4%/+0.3%
• Prior year-over-year PPI/core PPI growth: +3.3%/+3.5%
• Expected year-over-year PPI/core PPI growth: +3.3%/+3.3%
• Actual year-over-year PPI/core PPI growth: +3.5%/+3.6%

Retail Sales: January (Friday)
Retail sales unexpectedly slumped, marking the largest monthly decline in more than two years. The dip was widespread, with 9 of 13 categories experiencing falling sales.

• Expected/prior month retail sales monthly change: –0.2%/+0.4%
• Actual retail sales monthly change: –0.9%

The Takeaway

• The biggest news was the CPI and PPI being hotter than expected, leading to concerns that inflation may be reaccelerating.
• Small business optimism ticked lower, and retail sales posted a notable miss.

Financial Market Data

Equity

Source: Bloomberg, as of February 14, 2025

The technology-oriented Nasdaq Composite bounced back on the strength of Nvidia and Apple, which each rose at least 6.9 percent. Semiconductor manufacturers (and Apple) were buoyed after Apple reached a deal with Alibaba to provide AI to iPhone users in China. Dell also announced a $5 billion deal with Elon Musk’s xAI. International markets continued their strong start to the year, with the developed international MSCI EAFE benchmark up 2.91 percent. In addition to technology, communication services and materials fared well. Lagging sectors included health care, financials, and industrials.

Fixed Income

Source: Bloomberg, as of February 14, 2025

Treasury yields changed very little over the week. The 2-, 5-, 10-, and 30-year all moved less than 2 basis points (bps).

The Takeaway

• Technology stocks led the way in the U.S., with Nvidia and Apple posting large moves.
• The Treasury yield curve didn’t move much despite midweek volatility caused by inflation data.

Looking Ahead

Economic data and releases this week will primarily focus on housing and the Fed.

• On Tuesday, the National Association of Home Builders (NAHB) Housing Market Index for February will be released. Home builder confidence is expected to remain unchanged.
• On Wednesday, we expect the release of housing starts and building permits for January as well as last month’s Federal Open Market Committee (FOMC) meeting minutes. Housing starts and building permits are set to slow after mixed results in December. Economists and investors will closely analyze minutes from the FOMC meeting to better understand the rationale behind the central bank’s decision to pause rate cuts to start the year.
• Finally, on Friday, we expect the release of existing home sales for January. The pace of existing home sales is expected to slow.

Disclosures: This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

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 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 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 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. One basis point is equal to 1/100th of 1 percent, or 0.01 percent. One basis point (bp) is equal to 1/100th of 1 percent, or 0.01 percent.

###

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Authored by the Investment Research team at Commonwealth Financial Network^®.

© 2025 Commonwealth Financial Network^®

Presented by Mark Gallagher

Economic data was mixed, with stronger-than-expected existing home sales and a softer-than-expected Purchasing Managers Index (PMI). International markets fared well, thanks to a softer U.S. dollar and better-than-feared tariff policy. Bonds were little changed.

Quick Hits

1. Report releases: Existing home sales grew for the third consecutive month.
2. Financial market data: International markets led the way on a softer U.S. dollar and better-than-feared tariff policy.
   3. Looking ahead: Economic data will focus on consumer confidence, interest rates, economic growth, and personal income and spending.

Keep reading for an in-depth look.

Report Releases—January 21–24, 2025

U.S. Leading Economic Index (LEI): December (Wednesday)
As expected, the LEI softened slightly, declining 1.3 percent in the second half of 2024. The index was down because of lower confidence about future business conditions, soft manufacturing orders, and a slight uptick in unemployment claims.

• Prior/expected LEI change: +0.3%/–0.1%
• Actual LEI change: –0.1%

Initial Jobless Claims: December (Thursday)
Seasonally adjusted jobless claims were slightly higher than expected, up 9,500 from their four-week moving average of 213,500.

• Prior weekly jobless claims/expected weekly jobless claims: 217,000/221,000
• Actual weekly jobless claims: 223,000

Existing Home Sales: December (Friday)
Existing home sales rose for the third consecutive month, though the pace of sales remained subdued on a historical basis.

• Expected/prior month existing home sales change: +1.2%/+4.8%
• Actual existing home sales change: +2.2%

S&P Flash US PMIs: January (Friday)
The S&P Global US Composite PMI dipped from 55.4 to 52.4. Services led the softening, dropping from 56.8 to 52.8; conversely, manufacturing increased from 49.4 to 50.1, entering expansionary territory.

The Takeaway

• Economic data was mixed, with stronger-than-expected existing home sales and relatively stable jobless claims.
• The LEI and the U.S. services sector showed mild signs of softening.

Financial Market Data

Equity

Source: Bloomberg, as of January 24, 2025

Equities in global markets continued their recent move higher. International markets led the way; a weakening U.S. dollar and a slower (or potentially lighter) rollout of tariffs were factors. President Trump threatened a 10 percent tariff on China, well below earlier claims. Canada and Mexico remain in the crosshairs, with a 25 percent tariff potentially being imposed on February 1. Earnings have gotten off to a solid start, with 80 percent of S&P 500 companies reporting earnings above estimates, exceeding the five-year average of 77 percent.

Fixed Income

Source: Bloomberg, as of January 24, 2025

Treasury yields were relatively unchanged, with an incremental increase in rates in the belly of the curve. The 2-year and 30-year were flat, whereas the 5-year and 10-year increased just 1 basis point each.

The Takeaway

• International markets fared well on a softer U.S. dollar and better-than-feared tariff policy.
• Bonds were little changed.

Looking Ahead

It should be a busy week for markets. Economic data will primarily focus on consumer confidence, the Federal Open Market Committee (FOMC) rate decision, U.S. economic growth, and personal income and spending.

• On Tuesday, the Conference Board Consumer Confidence Index for January will be released. Confidence is expected to improve modestly.
• The FOMC will release its January rate decision on Wednesday. The Federal Reserve (Fed) is expected to keep short-term interest rates unchanged.
• On Thursday, the advance estimate of fourth-quarter GDP will be released and is set to show that the pace of economic growth slowed. Personal consumption growth is also expected to slow modestly.
• Finally, on Friday, personal income and personal spending data for December will be released. Both are set to rise, which would cap a strong year of income and spending growth.

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 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 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 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. One basis point is equal to 1/100th of 1 percent, or 0.01 percent. One basis point (bp) 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.

© 2025 Commonwealth Financial Network

Presented by Mark Gallagher

Manufacturer confidence improved more than expected in December. Equity markets remained risk-averse to start the year amid questions on policy and inflation. This week, we will see the December meeting minutes from the Federal Open Market Committee (FOMC), along with data on employment and consumer sentiment.

Quick Hits

1. Report releases: Manufacturer confidence improved more than expected last month.
2. Financial market data: Equity markets remained risk-averse to start the year amid questions on policy and inflation.
3. Looking ahead: This week, we expect December’s FOMC meeting minutes, along with data on employment and consumer sentiment.

Keep reading for an in-depth look.

Report Releases—December 30, 2024–January 3, 2025

Pending Home Sales: November (Monday)
Pending home sales beat estimates in November, marking five consecutive months with increasing sales growth. The Northeast was the lone region to decline.

-Expected/prior month pending home sales monthly change: +0.7%/+1.8%

-Actual pending home sales monthly change: +2.2%

Construction Spending: November (Thursday)
Construction spending was in line with the revised October figure of $2,152.3 billion.

-Expected/prior month construction spending monthly change: +0.3%/+0.4%

-Actual construction spending monthly change: +0.0%

Institute for Supply Management (ISM) Manufacturing Index: December (Friday)
Manufacturer confidence improved more than expected, driven in part by a rise in new orders.

-Expected/prior ISM Manufacturing index: 48.2/48.4

-Actual ISM Manufacturing index: 49.3

Auto Sales: December (Friday)
Auto sales reached their highest level since May 2021, totaling 16.8 million on an annualized basis.

The Takeaway

-We saw mostly positive data across multiple industries during the holiday-shortened week.

-Construction spending, which remained flat in November, is worth watching.

Financial Market Data

Equity

Source: Bloomberg, as of January 3, 2025

Global markets started the year lower, except for U.S. small-cap stocks. International markets, facing a strong U.S. dollar and soft economic data in China and Europe, remained under pressure. Two major stories were a 4.9 percent drop in Tesla’s fourth-quarter deliveries and news that Apple would offer a discount in the Chinese market. Energy, utilities, and real estate were the top performing sectors, whereas materials, discretionary, and staples underperformed.

Fixed Income

Source: Bloomberg, as of January 3, 2025

In a week of relatively low volume trading, the Treasury yield curve continued to steepen slightly. The longer end of the curve remained mostly unchanged, with the 30-year planted at 4.81 percent. The 2-year fell 5 basis points (bps) to 4.28 percent and the 10-year dipped 2 bps to 4.6 percent.

The Takeaway

-Equity markets remained risk-averse to start the year amid questions on policy and inflation.

-The yield curve continued to steepen after the Federal Reserve (Fed) indicated it would keep rates elevated in 2025.

Looking Ahead

This week, we will see the December meeting minutes from the FOMC, along with data on employment and consumer sentiment.

-Tuesday kicks things off with the release of the ISM Services index for December. Service sector confidence is set to improve after falling more than expected in November.

-On Wednesday, minutes from the FOMC’s December meeting will be released. Economists and investors will analyze them for hints on the path of monetary policy.

-Finally, on Friday, we’ll see the employment report for December and the preliminary University of Michigan consumer sentiment survey for January. The job report is expected to show that a solid 153,000 jobs were added, which would be a sign of continued healthy labor demand.

Disclosures: This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

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 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 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 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. One basis point is equal to 1/100th of 1 percent, or 0.01 percent. One basis point (bp) 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.

© 2025 Commonwealth Financial Network

Presented by Mark Gallagher

Quick Hits

1. Mixed Month for Markets

December was a mixed month for equity markets.

2. Bonds Fall as Federal Reserve Updates Guidance

Rising interest rates caused bond prices to fall at year-end.

3. Positive Economic Updates

The economic updates released in December showed continued economic growth.

4. Risks to Monitor

Markets face a number of risks both domestically and abroad.

5. Positive Outlook for the New Year

We believe the most likely path forward is for continued market appreciation and economic growth.

Mixed Month for Markets

December was a mixed month for markets, as investors pulled back from most U.S. stocks due to concerns over rising interest rates and economic uncertainty. Despite the year-end sell-off, all three major U.S. indices finished the quarter and year in positive territory. The S&P 500 lost 2.38 percent in December but managed a 2.41 percent gain for the quarter and an impressive 25.02 percent gain for the full year. The Dow Jones Industrial Average dropped 5.13 percent in December but was up 0.93 percent for the quarter and 14.99 percent over the full year. The technology-heavy Nasdaq Composite led the way with a 0.55 percent gain in December, which contributed to a 6.35 percent gain for the quarter and a 29.57 percent rise for the year.

Despite the mixed results in December, fundamentals were supportive. Per Bloomberg Intelligence, the average earnings growth rate for the S&P 500 in the third quarter was 9.1 percent. This is well above analyst estimates at the start of earning’s season for a 4.2 percent increase and highlights the continued fundamental health of U.S. companies. Over the long run, fundamentals drive market performance, so the continued earnings growth during the quarter was encouraging. Looking forward, analysts expect to see continued earnings growth in the fourth quarter and throughout 2025.

Technical factors were supportive as well to end the year. All three U.S. indices spent the entire month well above their respective 200-day moving averages. (The 200-day moving average is a widely monitored technical signal, as prolonged breaks above or below this level can signal shifting investor sentiment for an index.)

International equities experienced a challenging end to the year. The MSCI EAFE Index fell by 2.27 percent in December, which contributed to an 8.11 percent decline in the fourth quarter and just a 3.82 percent gain for the year. Emerging markets held up a bit better but also saw a year-end drop. The MSCI Emerging Markets Index lost 0.09 percent in December and fell 7.84 percent in the fourth quarter. On a full-year basis, however, the emerging markets index was up 8.05 percent in 2024. A strengthening dollar and rising political upheaval contributed to the year-end declines for international stocks. Technical factors were challenging for international stocks as the MSCI EAFE Index spent most of the month below its 200-day moving average, while the emerging markets index fell below trend by the end of the month.

Bonds Fall as Federal Reserve Updates Guidance

The stock market weakness was echoed by bond markets, which were also down to end the year. Long-term interest rates rose notably in December as the 10-year Treasury yield rose from 4.17 percent at the end of November to 4.57 percent at year-end. The Bloomberg Aggregate Bond Index lost 1.64 percent for the month and 3.06 percent for the quarter; however, the index managed to eke out a 1.25 percent gain for the year.

The rising interest rates during the month were due in part to updated guidance from the Federal Reserve following the conclusion of the Fed’s December meeting. The Fed lowered short-term interest rates by 25 basis points at this meeting, which was widely expected by investors and economists. What was less expected was the updated economic projections that showed the average Fed member expected to see just two more 25-basis-point rate cuts through the end of 2025, which was less than previously forecast. This means that the Fed remains cautious about the economy and inflation, and that it will be making decisions on a meeting-by-meeting basis in 2025.

High-yield bonds were also down for the month, as the Bloomberg U.S. Corporate High Yield Index dropped 0.43 percent in December. Despite the year-end decline, the index managed a 0.17 percent gain for the quarter and a strong 8.19 percent return for the year. High-yield credit spreads were volatile in 2024; however, they started the year at roughly 3.4 percent and ended the year at 2.9 percent. Tighter credit spreads indicate increasing investor appetite for higher-yielding securities and help explain the overperformance for high-yield bonds compared to investment-grade bonds during the year.

The Takeaway

-Rising long-term interest rates weighed on bonds to end the year.

-The Federal Reserve lowered short-term rates at its December meeting but indicated that future rate cuts may come at a slower pace in 2025.

Positive Economic Updates

Despite the volatility to end the year, the economic updates released in December continued to point toward solid economic growth. The November job report showed an encouraging rebound in hiring during the month following a weather-driven slowdown in October.

Consumer sentiment also showed signs of improvement, with the University of Michigan Consumer Sentiment survey improving for the fifth consecutive month in December. Historically, higher levels of consumer confidence have helped support faster spending growth, so this was an encouraging sign for future consumer spending.

Speaking of consumer spending, the November retail sales and personal spending reports came in strong, indicating solid consumer spending during the important holiday season. As seen in Figure 1, this now marks three consecutive months with strong retail sales growth. This is a positive sign for the health of the overall economy in the fourth quarter, given that consumer spending accounts for the majority of economic activity in the country.

The Takeaway

-The economic updates released in December showed continued growth.

-Hiring and consumer spending both improved in November, which was a good sign for overall economic growth.

Risks to Monitor

While the solid economic updates released in December were welcome, the stock market turbulence during the month served as a reminder that markets face real risks as we kick off 2025. Domestically, the primary risk is political. With a new administration and Congress, investors will be keeping a close eye on any policy proposals that could impact markets, especially when it comes to the inflation outlook. Part of the rise in long-term interest rates at year-end has been attributed to rising investor concerns about inflation in 2025 due to the policy uncertainty from Washington.

Foreign risks also remain that should be watched. The wars in Ukraine and the Middle East, as well as the recent political turmoil in France and South Korea, are prime examples of the geopolitical uncertainty that could impact markets. While the direct impact of these events has been limited so far for U.S. investors, we need to keep an eye on these potential sources of risk.

The Takeaway

-Political risks remain for markets both domestically and abroad.

-While the impact on markets has so far been minimal, this could change at a moment’s notice.

Positive Outlook for the New Year

Overall, though, we are still in a pretty good place to start the year. Markets fundamentals were impressively resilient throughout 2024, and this momentum is expected to carry over into 2025. Analysts expect to see continued earnings growth throughout the year, supported by a strong job market and rising consumer confidence.

Looking ahead, we believe the most likely path forward for the economy and markets is further growth and appreciation in the upcoming months. With that being said, December’s mixed results are a valuable reminder that we may face short-term setbacks along the way. Given the potential for short-term turbulence, a well-diversified portfolio that matches investor goals and timelines remains the best path forward for most. If concerns remain, however, you should speak with your financial advisor to go over your financial plans.

Disclosure: This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

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 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 government and corporate securities, mortgage-backed pass-through securities, and asset-backed securities. The Bloomberg 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. One basis point (bp) 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.

© 2025 Commonwealth Financial Network