Presented by Mark Gallagher
General market news
- The 10-year Treasury yield opened this week at 2.38 percent, well below its mid-March highs of more than 2.60 percent. The 30-year yield also remains low, opening at 3.01 percent this Monday morning.
- The market pain from last week’s defeat of the American Health Care Act didn’t linger long. The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average were all up, as investors appeared to turn their focus to the president’s tax reform plan. The more technology-oriented Nasdaq Composite Index led the way, posting a gain of 1.45 percent, as tech stocks returned 1.1 percent on the week.
- In other news, the United Kingdom triggered Article 50 on Wednesday, beginning its exit from the European Union; WTI crude oil recovered to $50 per barrel; and consumer confidence hit its highest level since December 2000, despite just a 0.1-percent increase in consumer spending. Leading sectors included energy, consumer discretionary, and materials. Utilities, telecom, and consumer staples were among those that lagged.
- Economic data released last week was mostly positive. The major news was an upward revision to gross domestic product growth for the fourth quarter of 2016, from 1.9 percent to 2.1 percent. Coming in at the higher end of estimates, this figure was largely driven by an increase in personal consumption. In that vein, personal income for February grew in line with estimates. Finally, initial jobless claims decreased, remaining near historically low levels.
| Equity Index | Week-to-Date | Month-to-Date | Year-to-Date | 12-Month |
| S&P 500 | 0.82% | 0.00% | 6.07% | 17.17% |
| Nasdaq Composite | 1.45% | 0.00% | 10.13% | 22.88% |
| DJIA | 0.32% | 0.00% | 5.19% | 19.91% |
| MSCI EAFE | 0.06% | 0.00% | 7.39% | 12.25% |
| MSCI Emerging Markets | –1.05% | 0.00% | 11.49% | 17.65% |
| Russell 2000 | 2.37% | 0.00% | 2.47% | 26.22% |
Source: Bloomberg
| Fixed Income Index | Month-to-Date | Year-to-Date | 12-Month |
| U.S. Broad Market | –0.05% | 0.82% | 0.44% |
| U.S. Treasury | –0.05% | 0.67% | –1.44% |
| U.S. Mortgages | 0.03% | 0.47% | 0.17% |
| Municipal Bond | 0.22% | 1.58% | 0.15% |
Source: Morningstar Direct
What to look forward to
Several widely tracked economic data points will be released this week. On Monday, the ISM Manufacturing Index is expected to remain in expansionary territory.
On Wednesday, the March meeting minutes of the Federal Open Market Committee will be released. This document should shed further light on the thinking behind the March rate hike and the future path of Federal Reserve policy.
The week will end with the release of the Employment Report for March.
Disclosures: Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. All indices are unmanaged and are not available for direct investment by the public. Past performance is not indicative of future results. The S&P 500 is based on the average performance of the 500 industrial stocks monitored by Standard & Poor’s. The Nasdaq Composite Index measures the performance of all issues listed in the Nasdaq Stock Market, except for rights, warrants, units, and convertible debentures. The Dow Jones Industrial Average is computed by summing the prices of the stocks of 30 large companies and then dividing that total by an adjusted value, one which has been adjusted over the years to account for the effects of stock splits on the prices of the 30 companies. Dividends are reinvested to reflect the actual performance of the underlying securities. The MSCI EAFE Index is a float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a market capitalization-weighted index composed of companies representative of the market structure of 26 emerging market countries in Europe, Latin America, and the Pacific Basin. The Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000® Index. The Bloomberg Barclays US Aggregate Bond Index is an unmanaged market value-weighted performance benchmark for investment-grade fixed-rate debt issues, including government, corporate, asset-backed, and mortgage-backed securities with maturities of at least one year. The U.S. Treasury Index is based on the auctions of U.S. Treasury bills, or on the U.S. Treasury’s daily yield curve. The Bloomberg Barclays US Mortgage Backed Securities (MBS) Index is an unmanaged market value-weighted index of 15- and 30-year fixed-rate securities backed by mortgage pools of the Government National Mortgage Association (GNMA), Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (FHLMC), and balloon mortgages with fixed-rate coupons. The Bloomberg Barclays US Municipal Index includes investment-grade, tax-exempt, and fixed-rate bonds with long-term maturities (greater than 2 years) selected from issues larger than $50 million.
###
Mark Gallagher is a financial advisor located at Gallagher Financial Services at 2586 East 7th Ave. Suite #304, North Saint Paul, MN 55109. He offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. He can be reached at 651-774-8759 or at mark@markgallagher.com.
Authored by the Investment Research team at Commonwealth Financial Network.
© 2017 Commonwealth Financial Network®