Presented by Mark Gallagher

Consumer confidence improved more than expected. Equity markets continued to show signs of broadening beyond Nvidia and Tesla. We expect several important reports this week, highlighted by employment data on Friday.Quick Hits

1. Report releases: Consumer confidence improved more than expected.
2. Financial market data: Equity markets continued to show signs of broadening beyond Nvidia and Tesla.
3. Looking ahead: We expect several important reports this week, highlighted by employment data on Friday.

Keep reading for an in-depth look.

Report Releases—November 25–29, 2024

Conference Board Consumer Confidence Index: November (Tuesday)
Confidence rose more than expected as consumers’ assessment of current business and labor market conditions improved. The short-term outlook also improved for consumers.

-Expected/prior month consumer confidence level: 111.0/108.7

-Actual consumer confidence level: 111.7

Federal Open Market Committee (FOMC) Meeting Minutes: November (Tuesday)
FOMC meeting minutes noted continued interest rate cuts but at a more gradual level because inflation remains higher than the Federal Reserve’s (Fed’s) long-term target.

Durable Goods Orders: October (Wednesday)
Durable goods orders were lower than expected but experienced a recovery in transportation equipment after two months of declines.

-Expected/prior month durable goods orders change: +0.5%/–0.4%

-Actual existing durable goods orders change: +0.2%

Personal Income and Spending: October (Wednesday)
Personal income rose more than expected in October, whereas personal spending was in line with expectations.

-Expected/prior release personal income change: +0.3%/+0.3%

-Actual personal income change: +0.6%

-Expected/prior release personal spending change: +0.4%/+0.6%

-Actual personal spending change: +0.4%

The Takeaway

-Consumer confidence and personal income were better than expected.

-FOMC meeting minutes showed the Fed expects future rate cuts to come at a more gradual pace.

Financial Market Data

Equity

Source: Bloomberg, as of November 29, 2024

The Developed Markets International Index in the MSCI EAFE led the way. Domestically, the Dow Jones Industrial Average outperformed. In the Nasdaq Composite, Tesla and Nvidia lagged. Apple, Amazon, Microsoft, Eli Lilly, Meta Platforms, Alphabet, and Berkshire Hathaway were top contributors.

Fixed Income

Source: Bloomberg, as of November 29, 2024

The Treasury yield curve saw a deeper inversion as the areas beyond the 2-year moved notably lower. The 10-year declined more than 23 basis points (bps) amid a stronger-than-expected set of Treasury auctions.

The Takeaway

-Equity markets continued to show signs of broadening beyond Nvidia and Tesla.

-The back end of the yield curve came down notably amid stronger Treasury auctions.

Looking Ahead

This week, we expect several important reports, highlighted by Friday’s employment data.

-The week kicks off Monday with the Institute for Supply Management (ISM) Manufacturing index. The sector is expected to see slight improvement but is expected to remain in contractionary territory.

-On Wednesday, the ISM Services index will be released. Services are expected to hold steady at 57, which remains firmly in expansionary territory.

-The trade deficit, anticipated on Thursday, is expected to drop by roughly $10 billion.

-The week will close Friday with the employment report for November. Employment is expected to improve notably after October’s major miss.

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.

© 2024 Commonwealth Financial Network

Presented by Mark Gallagher

Housing data was mixed; home builder confidence and existing home sales fared better than expected but new home starts disappointed. A strong dollar increased market breadth beyond the so-called Magnificent Seven. The front end of the Treasury yield curve lifted because of rising inflation expectations.

Quick Hits

1. Report releases: The pace of existing home sales rose for the first time in three months in October.
2. Financial market data: A strong dollar has helped increase market breadth.
3. Looking ahead: We expect data on consumer confidence, durable goods orders, and personal income and spending this week.

Keep reading for an in-depth look.

Report Releases—November 18–22, 2024

National Association of Home Builders Housing Market Index: November (Monday)
Home builder sentiment improved more than expected, lifting the index to a seven-month high.

-Expected/prior month sentiment: 42/43

-Actual sentiment: 46

Housing Starts and Building Permits: October (Tuesday)
Housing starts and building permits missed economist estimates, dropping the pace of new home construction to a three-month low.

-Expected/prior month housing starts monthly change: –1.5%/–1.9%

-Actual housing starts monthly change: –3.1%

-Expected/prior month building permits monthly change: +0.7%/–3.1%

-Actual building permits monthly change: –0.6%

Existing Home Sales: October (Thursday)
The pace of existing home sales rose for the first time in three months. Despite the increase, the pace of sales remains muted historically.

-Expected/prior month existing home sales change: +2.9%/–1.3%

-Actual existing home sales change: +3.4%

Final University of Michigan Consumer Sentiment Survey: November (Friday)
Consumer sentiment regarding current economic conditions fell 1.5 percent month-over-month.

-Expected/prior release consumer sentiment level: 73.5/73.0

-Actual consumer sentiment level: 71.8

The Takeaway

-Housing data was mixed; home builder confidence and existing home sales fared better than expected but new home starts disappointed.

-Consumer sentiment fell as current economic conditions weighed on the index.

Financial Market Data

Equity

Source: Bloomberg, as of November 22, 2024

U.S. stocks, paced by small-caps, continued to lead global equity markets. The Russell 2000 index rose more than 4.4 percent as the U.S. dollar continued to gain strength. Nvidia finished flat after announcing earnings on Wednesday night. Alphabet lost 4.5 percent after speculation that the company may be forced to sell its Chrome web browser; the Justice Department suggested Google has a monopoly in online search.

Fixed Income

Source: Bloomberg, as of November 22, 2024

The front end of the Treasury yield curve lifted as short-to-intermediate-term inflation expectations continued to rise. The 2-year increased 7 basis points (bps), closing at 4.37 percent; the longer end of the curve was mostly unchanged.

The Takeaway

-Nvidia’s earnings turned out to be a less volatile event than expected; the firm’s earnings beats have been smaller recently.

-The front end of the yield curve lifted on rising short-to-intermediate-term inflation expectations.

Looking Ahead

Despite a holiday-shortened week, we expect several important releases focusing on consumer confidence, durable goods orders, and personal income and spending. Minutes from the November meeting of the Federal Open Market Committee (FOMC) will also be released.

-On Tuesday, we anticipate the release of consumer confidence data and minutes from November’s FOMC meeting.

-On Wednesday, we expect data on durable goods orders and personal income and spending for October. All are set to rise.

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.

© 2024 Commonwealth Financial Network

Presented by Mark Gallagher

A blowout jobs report helped propel the S&P 500 to its fourth consecutive week of gains.

Quick Hits

1. Report releases: Positive employment data led to a reassessment of a slowing economy.
2. Financial market data: Equities and yields rose on the back of the excellent jobs report.
3. Looking ahead: Inflation and Federal Reserve (Fed) meeting minutes will color rate
   policy expectations.

Report Releases—September 30–October 4, 2024

Institute for Supply Management (ISM) Manufacturing Index: September (Tuesday)

Manufacturer confidence was unchanged, leaving the index in contractionary territory for the month.

-Expected/prior ISM Manufacturing index: 47.5/47.2

-Actual ISM Manufacturing index: 47.2

ISM Services Index: September (Thursday)

Service sector confidence improved much more than expected, due in large part to a surge in new orders during the month.

-Expected/prior ISM Services index: 51.7/51.5

-Actual ISM Services index: 54.9

Employment Report: September (Friday)
Hiring surged, with an impressive 254,000 jobs added during the month. The unemployment rate fell to 4.1 percent, marking a three-month low.

-Expected/prior change in nonfarm payrolls: +150,000/+159,000

-Actual change in nonfarm payrolls: +254,000

The Takeaway

-After a string of softer reports, employment data was much better than expected, helping slow rate cut expectations.

-Service sector confidence improved much more than expected, leading to a solid week of economic data, marred only by a slightly lower-than-expected ISM manufacturing report.

Market Data

Equity

Source: Bloomberg, as of October 4, 2024

The S&P 500 and Nasdaq Composite registered a fourth consecutive week of gains after Friday’s impressive jobs report. That data helped bring back the soft-landing narrative after a few months of weaker economic data led to the Fed’s 50 basis point (bps) rate cut. Oil prices rose, along with geopolitical tensions between Israel and Iran. This helped lead to energy outperformance. Underperformers included apparel manufacturers, trucking, regional banks, home builders,
and electric vehicles.

Fixed Income

Source: Bloomberg, as of October 4, 2024

Yields rose across the curve after the jobs report, which lowered Fed rate cut expectations and caused investors to reassess economic growth expectations. After the employment report was released, the probability of a 50 bps rate cut in November dropped from roughly 50 percent to nearly 0 percent. The rise in shorter-term rates led to the Treasury yield curve inverting again because shorter-term rates rose more than long-term rates.

The Takeaway

-A blowout jobs report helped support equities, leading to a fourth consecutive week of gains.

-Yields rose as the narrative of a softening economy seemed to dissipate—along with the probability of another 50 bps rate cut next month.

Looking Ahead

This week, data will focus on the Fed’s meeting minutes, inflation, and consumer sentiment.

-The week kicks off with the trade balance, which is expected to fall modestly in August after increasing notably in July.

-Meeting minutes from the September Federal Open Market Committee (FOMC), expected on Wednesday, should provide insight into the decision-making that led to the 50 bps rate cut.

-On Thursday, the Consumer Price Index report for September will be released. It’s expected to show that headline inflation dropped to 2.3 percent and core inflation remained unchanged at 3.2 percent.

-We expect two reports on Friday: the Producer Price Index, which is set to show a 0.1 percent monthly increase; and the University of Michigan consumer sentiment survey, which is expected to show a modest decline.

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.

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.

© 2024 Commonwealth Financial Network

Presented by Mark Gallagher
Quick Hits

1. Stocks Rally in September to Cap Off Strong Third Quarter

Stocks continued to rise in September as improving fundamentals and lower interest rates supported returns.

2. Strong Quarter for Bonds

September capped off a strong quarter for bond investors.

3. Federal Reserve Cuts Interest Rates

The Fed lowered the federal funds rate in September for the first time in more than four years.

4. Healthy Economic Backdrop

Economic updates released during the month showed signs of continued growth.

5. Real Risks Remain

Markets face a variety of risks as we kick off the fourth quarter.

6. Cautious Optimism Warranted

The most likely path forward is for continued market appreciation and economic growth.

Stocks Rally in September

Stocks continued their recent rally in September, with all three major U.S. indices up for the month and quarter. The S&P 500 gained 2.14 percent in September and 5.89 percent for the quarter, while the Dow Jones Industrial Average (DJIA) was up 1.96 percent during the month and 8.72 percent for the quarter. Both the S&P 500 and DJIA hit new record highs in September before falling back modestly to end the month. The technology-heavy Nasdaq Composite gained 2.76 percent for the month and quarter as technology stocks experienced heightened turbulence over the summer compared to the broader market.

These positive results were supported by improving fundamentals. Per Bloomberg Intelligence, the average earnings growth rate for the S&P 500 in the second quarter was nearly 14 percent. This is well above analyst estimates at the start of earnings season for a more modest 8.3 percent increase. Because fundamentals ultimately drive long-term market performance, this was an encouraging development for investors as it showcased the continued health of American businesses.

Technical factors were supportive as well for the month and quarter. All three major indices spent the entire month well above their respective 200-day moving averages. (The 200-day moving average is a widely tracked technical signal, as prolonged breaks above or below this level can indicate shifting investor sentiment for an index.) All three of the major U.S. indices have spent the entire year above their respective trendlines, indicating continued investor support for U.S. stocks.

The story was similar internationally for the month and quarter. The MSCI EAFE Index gained 0.92 percent in September, capping off a 7.26 percent gain for the quarter. The MSCI Emerging Markets Index surged 6.72 percent in September, which contributed to an 8.88 percent gain for the quarter. The announcement of major stimulus policies in China toward the end of the month led to the outperformance for emerging markets in September.

Technical factors were supportive for international stocks during the month. Both indices spent the entire month above trend. This was especially encouraging for the emerging market index, which had previously briefly dipped below its 200-day moving average in early August.

Strong Quarter for Bonds

September was another positive month for bonds, capping off a strong quarter for fixed income investors. Falling interest rates over the month and quarter helped support bond returns throughout the summer. The 10-year Treasury yield fell from 4.48 percent at the start of July to 3.81 percent by the end of September. Short-term rates fell notably as well during the quarter due to heightened expectations for Fed rate cuts. The Bloomberg Aggregate Bond Index gained 1.34 percent during the month and an impressive 5.20 percent in the third quarter.

High-yield fixed income, which is typically less driven by interest rate movements, also had a strong month and quarter. The Bloomberg US Corporate High Yield Index gained 1.62 percent in September and 5.28 percent for the quarter. High-yield credit spreads compressed from 3.21 percent at the start of the quarter to 3.03 percent at quarter-end. Tighter credit spreads indicate increased investor appetite for high-yield investments.

Federal Reserve Cuts Interest Rates

The Fed cut the upper target of the federal funds rate by 50 basis points at the conclusion of its September meeting. This brought the upper limit from 5.50 percent down to 5.0 percent. As you can see in Figure 1, this marked the first interest rate cut in more than four years and indicates that the Fed is shifting away from the restrictive monetary policy that we’ve recently experienced in favor of more supportive policy ahead.

Figure 1: Federal Open Market Committee Federal Funds Target Rate Upper Limit, October 2016–Present

Source: Federal Reserve Board/Haver Analytics, September 18, 2024.

The 50-basis-point cut was larger than most economists had anticipated; however, it was in-line with market pricing heading into the meeting. Fed chair Jerome Powell indicated in his post-meeting press conference that the Fed remains committed to its dual mandate of promoting stable prices and maximum employment. Given the improvements that we’ve seen on the inflation front over the past two years, central bankers decided that the time was right to shift toward a more accommodative policy given recent signs of potential weakness in the labor market.

Markets rallied following the Fed’s announcement, as lower interest rates can help support valuations and fundamentals. Looking forward, futures markets have priced in expectations for additional rate cuts through the end of this year and into 2025. Although the Fed raised rates throughout 2022 and 2023 and kept them high in 2024 to combat inflation, looking ahead, this headwind is set to shift into a tailwind for markets and the economy.

The Takeaway

-The Fed cut interest rates by 50 basis points at its September meeting.

-Further rate cuts are expected through the end of this year and into 2025.

Healthy Economic Backdrop

While interest rates were the primary story in September, economic updates released during the month were also encouraging. Hiring rebounded as a solid 142,000 jobs were added in August, up from a downwardly revised 89,000 in July. The unemployment rate also fell from 4.3 percent in July back down to 4.2 percent in August. While the pace of hiring has slowed since earlier in the year, slower growth is still growth, and job creation at these levels is a sign of continued economic expansion, especially following years of above-average job growth.

One of the benefits from the recent years of strong hiring that we’ve seen is that consumers remain willing and able to spend. That remained the case in August as retail sales growth came in above economist estimates and personal spending grew for the 17th consecutive month. Consumer spending is the major driver of U.S. economic activity and has remained impressively resilient over the course of the year.

Business activity was also healthy during the month, as durable goods orders came in above estimates. Industrial and manufacturing production also rebounded well past expectations following weather-driven declines earlier in the summer.

Finally, we even saw improvements on the inflation front, with year-over-year CPI growth falling to 2.5 percent in August, down from 2.9 percent in July. This marks a more than three-year low and highlights the improvements that we’ve seen over the past two years when it comes to inflation. While there is still real work to be done to get inflation back to the Fed’s 2 percent target, the continued improvement in August was certainly welcome.

The Takeaway

-The economic data releases in September showed signs of continued economic growth.

-Hiring rebounded in August and consumer spending remained robust.

-Inflation continued to fall, highlighting the improvements that we’ve seen over the past two years.

Real Risks Remain

While the fundamentals and economic backdrop remain supportive for investors, there are real risks that markets face, which should be mentioned. The primary risk domestically is a further economic slowdown in the months ahead. The labor market will be key to monitor here, as any additional weakness could be a sign of potential slowing economic growth. Additionally, political uncertainty is expected to continue to rise as we approach the November elections.

Foreign risks remain as well, as shown by the ongoing conflicts in Ukraine and the Middle East as well as the slowdown in China. These sources of potential uncertainty could escalate and lead to additional regional and global market volatility. And, of course, there are also the unknown risks that could negatively impact markets at any time.

The Takeaway

-The health of the labor market and rising political uncertainty are risks worth monitoring.

-International and unknown risks should be acknowledged as well.

Cautious Optimism Warranted

Despite the real risks that markets face, overall, we remain in a relatively good place as we finish out the third quarter and head into the end of the year. Market fundamentals remain sound and the economic backdrop is expected to remain broadly supportive through the end of the year. Additionally, the headwind from high interest rates that we’ve experienced over the past two years is set to transition to a tailwind in the months ahead.

While there are certainly sources of potential uncertainty that investors should be aware of, the outlook remains cautiously optimistic as further market appreciation and economic growth remains the most likely path forward. Of course, we may face short-term setbacks along the way and, therefore, a well-diversified portfolio that matches investor goals and timelines remains the best path forward for most. As always, if concerns remain, you should speak to your financial advisor to review 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.

© 2024 Commonwealth Financial Network