Weekly Market Update, September 29, 2014

Posted on October 9, 2014 by Neal Gallagher

Presented by Mark Gallagher

General market news
• The 10-year Treasury opened lower for the second consecutive week, with a yield of 2.51 percent, down from 2.57 percent last week and 2.62 percent the previous week. The yield on the 30-year Treasury, which stood at approximately 3.38 percent last week, its highest level since early summer, was back down to 3.18 percent Monday morning.
• A 0.80-percent rally for the S&P 500 on Friday wasn’t enough to offset weakness earlier in the week, and the index ended up declining 1.34 percent. Higher-beta indices such as the MSCI Emerging Markets and the Russell 2000 fared significantly worse, with losses of 2.65 percent and 2.34 percent, respectively.
• The third quarter comes to an end this week, which means earnings season is just around the corner. Investors are eagerly anticipating the latest news on earnings strength and corporate outlooks for the rest of the year, but reporting season also brings with it some added volatility.

Equity Index	Week-to-Date %	Month-to-Date %	Year-to-Date %	12-Month %
S&P 500	–1.34%	–0.89%	8.91%	19.15%
Nasdaq Composite	–1.46%	–1.43%	9.01%	20.65%
DJIA	–0.96%	0.17%	5.02%	14.25%
MSCI EAFE	–1.53%	–2.62%	0.42%	5.45%
MSCI Emerging Markets	–2.65%	–5.53%	4.62%	5.11%
Russell 2000	–2.34%	–4.55%	–2.88%	5.15%

Source: Bloomberg

Fixed Income Index	Month-to-Date %	Year-to-Date %	12-Month %
U.S. Broad Market	–0.69%	4.31%	4.17%
U.S. Treasury	–0.74%	3.55%	2.72%
U.S. Mortgages	–0.20%	4.15%	3.82%
Municipal Bond	0.01%	8.19%	8.61%

Source: Bloomberg

What to look forward to
The week will kick off with the release of Personal Income data, which is expected to show an increase.

On Tuesday, analysts expect to see a year-over-year decrease in the S&P/Case-Shiller home price index. On the heels of that data will come ISM Manufacturing and Non-Manufacturing numbers, as well as Factory Orders, which are expected to decrease.

The week will end with a report on the Employment situation, which analysts predict will remain unchanged.

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, September 22, 2014

Posted on October 9, 2014 by Neal Gallagher

Presented by Mark Gallagher

General market news
• Starting last week around 2.60 percent, the 10-year Treasury yield went as high as 2.65 percent after the Federal Reserve’s meeting, dropping back down to 2.57 percent on Friday and opening there early Monday. The recent heightened volatility stems from market anticipation of the Fed’s movements.
• The Fed meeting came and went, with no significant change in language, no change in rate policies, and a continued commitment to low rates. Yet markets seemed to be thrown off, reluctant to believe that the Fed is set to keep rates low for a while. Yet, time and again, in this new era of Fed transparency, the committee is more predictable than ever.
• Equity markets were mixed for the week, with large-cap domestic equity leading the way higher. The S&P 500 Index and the Dow Jones Industrial Average established new all-time highs, while the Russell 2000 retraced 1.17 percent.
• Closing out the week, investors welcomed the much-anticipated IPO of Alibaba (BABA), which raised a record $25 billion in the offering.

Equity Index	Week-to-Date %	Month-to-Date %	Year-to-Date %	12-Month %
S&P 500	1.28%	0.46%	10.39%	19.15%
Nasdaq Composite	0.27%	0.03%	10.62%	22.40%
DJIA	1.73%	1.15%	6.05%	13.09%
MSCI EAFE	0.17%	−0.98%	2.12%	6.73%
MSCI Emerging Markets	−0.42%	−2.72%	7.72%	6.19%
Russell 2000	−1.17%	−2.27%	−0.56%	8.04%

Source: Bloomberg

Fixed Income Index	Month-to-Date %	Year-to-Date %	12-Month %
U.S. Broad Market	−0.96%	4.03%	4.42%
U.S. Treasury	−1.09%	3.18%	2.89%
U.S. Mortgages	−0.47%	3.87%	4.09%
Municipal Bond	−0.27%	7.89%	8.79%

Source: Bloomberg
What to look forward to
This week, we will see data on both Existing and New Home Sales, which are projected to decline in August after beating expectations in July.

Durable Goods Orders data will be released Wednesday and is expected to rise, especially in transportation.

The week will wrap up with GDP data, expected to come in at 4.2 percent.

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Authored by the Investment Research team at Commonwealth Financial Network.

Weekly Market Update, September 15, 2014

Posted on October 8, 2014 by Neal Gallagher

Presented by Mark Gallagher

General market news
• The Treasury curve has experienced a sharp move upward during the month of September. The benchmark 10-year yield finished the week just above 2.60 percent, up nearly 26 basis points from one month ago.
• Equity markets trended lower last week, led by the S&P 500, which lost 1.05 percent. Other domestic indices fared slightly better but were also in the red for the week. International markets, on the other hand, declined more than their domestic peers, as the dollar continued to strengthen.
• The Federal Open Market Committee (FOMC) meeting this Wednesday is the second-to-last meeting at which the Fed will likely continue tapering the current QE program. We expect that the Fed will end QE at the subsequent meeting on October 29.

Equity Index	Week-to-Date %	Month-to-Date %	Year-to-Date %	12-Month %
S&P 500	–1.05%	–0.80%	9.00%	20.07%
Nasdaq Composite	–0.31%	–0.24%	10.32%	24.28%
DJIA	–0.81%	–0.57%	4.24%	13.06%
MSCI EAFE	–1.27%	–1.16%	1.94%	9.99%
MSCI Emerging Markets	–3.15%	–2.31%	8.18%	10.56%
Russell 2000	–0.77%	–1.11%	0.62%	11.55%

Source: Bloomberg

Fixed Income Index	Month-to-Date %	Year-to-Date %	12-Month %
U.S. Broad Market	–1.12%	3.86%	5.24%
U.S. Treasury	–1.24%	3.02%	3.60%
U.S. Mortgages	–0.66%	3.67%	5.13%
Municipal Bond	–0.41%	7.74%	10.34%

Source: Bloomberg

What to look forward to
In addition to the FOMC meeting, a number of important economic data points are being released this week. Industrial Production will be reported on Monday and is expected to rise.

Producer Price Index data, expected to remain fairly flat as a whole, will be released on Tuesday, while Wednesday will be highlighted by CPI, which is expected to increase slightly in continuation of an upward trend, and the FOMC announcements.

Finally, Housing Starts, to be announced Thursday, are projected to rise.

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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@markgallaghe.com.
Authored by the Investment Research team at Commonwealth Financial Network.

Weekly Market Update, September 2, 2014

Posted on September 8, 2014 by Neal Gallagher

Presented by Mark Gallagher

General market news
• Equity markets continued to march higher last week, with the S&P 500 and the Dow Jones Industrial Average both hitting all-time highs.
• Starting last week at 2.40 percent, the yield on the 10-year Treasury dropped as low as 2.32 percent late in the week. After the long weekend, the 10-year yield was back up to 2.38 percent early Tuesday morning. We saw a similar but less drastic move on the long bond, with the 30-year Treasury yield starting last week at 3.16 percent, dropping as low as 3.06 percent late in the week, and bouncing back up to 3.13 percent early Tuesday morning.
• The markets will be anticipating the midweek release of the Federal Reserve’s Beige Book report, which summarizes the economic conditions in each district and sector. Wednesday’s report will be followed by speeches from six Fed officials over the next few days and Ben Bernanke next week, leading up to the September 16 Fed meeting.
• As investors return from summer vacation, we expect volume in the equity markets to pick up in the coming weeks, and investors will begin to focus more narrowly on earnings for both the third and fourth quarters.

Equity Index

Week-to-Date % Month-to-Date % Year-to-Date % 12-Month %
S&P 500

0.80% 4.00% 9.88% 25.23%
Nasdaq Composite

0.94% 4.99% 10.59% 29.22%
DJIA

0.63% 3.60% 4.84% 18.18%
MSCI EAFE

0.56% −0.18% 3.05% 17.16%
MSCI Emerging Markets

0.42% 2.20% 10.65% 20.28%
Russell 2000

1.24% 4.96% 1.75% 17.68%
Source: Bloomberg

Fixed Income Index

Month-to-Date % Year-to-Date % 12-Month %
U.S. Broad Market

−0.02% 5.02% 5.80%
U.S. Treasury

0.01% 4.32% 4.15%
U.S. Mortgages

−0.01% 4.25% 5.26%
Municipal Bond

0.01% 8.20% 11.14%
Source: Bloomberg

What to look forward to
The week will feature data on ISM Manufacturing, which is expected to contract slightly, and Factory Orders, which are expected to increase. We will also see ISM Non-Manufacturing data, which is expected to contract.

The week will end with the August Employment report, with analysts predicting a slight drop in the unemployment rate, from 6.2 percent to 6.1 percent. Gains are anticipated in Nonfarm Payrolls and Average Hourly Earnings.

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For IARs: Mark Gallagher is a financial advisor located at Gallagher Financial Services at 2586 East 7th Avenue Suite # 304, North Saint Paul, MN. 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.