Presented by Mark Gallagher

Quick Hits

1. Solid December Caps Strong Year for Markets
2. Fixed Income Continues to Rally
3. Economic Updates Show Continued Growth
4. Focus on the Fed
5. Risks to Monitor
6. Positive Outlook for the New Year

Solid December Caps Strong Year for Markets
Markets continued to rally in December, with the positive returns during the month contributing to a strong end to the year. The S&P 500 gained 4.54 percent in December, 11.69 percent in the fourth quarter, and an impressive 26.29 percent over the course of the year. The Dow Jones Industrial Average (DJIA) was up 4.93 percent for the month, 13.09 percent for the quarter, and 16.18 percent for the year. The technology-heavy Nasdaq Composite saw the largest gains with the index up 5.58 percent in December, 13.79 percent during the quarter, and 44.64 percent for the year. Markets were boosted by signs of continued economic growth and falling interest rates at year-end.

Fundamental factors were supportive for markets to end the year. Per Bloomberg Intelligence, the average earnings growth rate for the S&P 500 in the third quarter was 4.48 percent. This was notably better than analyst estimates at the start of earnings season for a 1.22 percent decline in earnings. The better-than-expected results during the quarter were widespread, as earnings growth in most sectors beat expectations. Over the long run fundamentals drive market performance, so the return to solid earnings growth during the quarter was a positive sign for investors.

Technical factors were also supportive during the month, as all three major U.S. indices ended the month well above their respective 200-day moving averages. This now marks two consecutive months with all three indices ending the month above trend. 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. The combination of improving fundamentals and supportive technicals to end the year are a good sign for U.S. equities as we head into the new year.

The story was much the same internationally, as a year-end rally helped support solid performance for international stocks over the quarter and year. The MSCI EAFE Index gained 5.31 percent in December, 10.42 percent during the quarter, and a solid 18.24 percent throughout the course of the year. The MSCI Emerging Markets Index gained 3.95 percent in December, 7.93 percent for the quarter, and 10.27 percent for the year. Technical factors were supportive for international stocks to end the year, with both the MSCI EAFE and MSCI Emerging Markets indices finishing the month above trend. This now marks two straight months with continued technical support for foreign stocks after a three-month stretch from August through October where both indices fell below their respective trendlines.

Fixed Income Continues to Rally
Fixed income markets continued to rally to end the year, supported by falling interest rates. The 10-year U.S. Treasury Yield fell from 4.37 percent at the end of November to 3.88 percent at the end of December. Short-term rates fell as well, with the two-year Treasury yield dropping from 4.73 percent at the end of November to 4.23 percent to end the year. The Bloomberg Aggregate Bond Index gained 3.83 percent for the month and 6.82 percent for the quarter. The strong fourth quarter helped offset earlier weakness for the index, which finished the year with a 5.53 percent return.

High-yield fixed income also performed well to end the year. The Bloomberg U.S. Corporate High Yield Index gained 3.73 percent for the month, 7.16 percent for the quarter, and 13.45 percent throughout the course of the year. High-yield credit spreads ended the year at 3.32 percent, which was well below the 2023 high of 5.22 percent we saw in March and the 3.84 percent level at the end of November. The fall in credit spreads to close the year indicates that investors ended the year with a rising appetite for riskier, high-yield securities.

Economic Updates Show Continued Growth
The economic updates released in December painted a picture of continued economic growth to end the year. Hiring accelerated in November, with a better-than-expected 199,000 jobs added during the month. We also saw a rebound in consumer confidence in December, as increased consumer optimism caused both major measures of consumer sentiment to end the year at multi-month highs.

The improved consumer sentiment was due in part to further progress in the fight against inflation. Headline consumer inflation fell to 3.1 percent on a year-over-year basis in November, well below the recent high of 9.1 percent that we saw in June 2022. While there is still work to be done to get inflation back down to the Federal Reserve’s 2 percent target, the improvement we’ve seen over the past two years is an encouraging sign that we are heading in the right direction. Consumers responded to the falling inflation figures by lowering their inflation expectations, which in turn helped support the rise in sentiment at year-end.

The improving confidence was an encouraging sign as historically higher levels of confidence have supported faster spending growth. Speaking of spending growth, retail sales and personal spending both improved in November, which is a good sign for sales during the busy holiday season. As you can see in Figure 1 below, the 0.3 percent rise in retail sales in November represented a rebound following a surprising drop in sales in October.

Figure 1: Retail Sales & Food Services, December 2020–Present

Given the importance of consumer spending on the overall economy, the return to spending growth, and improved confidence at year-end are a positive signal for the economy as we kick off the new year.

The Takeaway

– There are signs of continued economic growth at year-end.

– Improved consumer confidence should support spending and economic growth in the new year.

Focus on the Fed
With inflation continuing to show signs of improvement and markets rallying on the news, one of the major question marks as we enter 2024 is what the Fed has planned for monetary policy throughout the course of the year. The Fed kept interest rates unchanged at its December meeting and Fed chair Jerome Powell indicated in his post-meeting press conference that the central bankers were considering cutting interest rates in 2024. He did indicate that the timing for any future cuts will remain dependent on developments in the economic data.

We ended the year with markets pricing in a total of six interest rate cuts throughout 2024. Fed members on the other hand ended the year projecting a median of three interest rate cuts in 2024. This disconnect between Fed and market rate expectations will be worth monitoring in the months ahead, as it could represent a risk to markets if investors overestimate the Fed’s willingness to cut rates throughout the course of the year.

Any talk of rate cuts will be dependent on how inflation and the economy develop in 2024. While the most likely path forward is for continued modest improvement in the months ahead, we could still see inflation reaccelerate, which in turn could lead to delayed rate cuts or even rate hikes at future Fed meetings. While the progress we’ve made so far in combating inflationary pressure has been impressive, we’re not in the clear when it comes to inflation and the Fed.

The Takeaway

– Despite positive progress in combating inflation, questions on the path of monetary policy in 2024 remain.

– The Fed and inflation will continue to present a risk to markets in 2024.

Risks to Monitor
While the Fed and inflation remain the most immediate risks, there are other risks to markets and the economy. Domestically, the U.S. elections in November are approaching and could lead to uncertainty in the second half of the year.

International risks remain as well, highlighted by ongoing wars in Europe and the Middle East. While the immediate market impact from the current conflicts has been muted, we could see an escalation that could lead to further instability in the regions. International shipping and supply lines may be especially vulnerable to rising tension in the Middle East and this will be an important area to monitor in the months ahead given the importance of international trade in the fight against inflation.

Finally, we also have unknown risks that could negatively impact markets. At this time last year few investors were talking about weakness in the U.S. banking industry or a potential government default, both of which caused brief bouts of market turbulence in 2023.

The Takeaway

– Market and economic risks remain, with inflation and the 2024 elections serving as the primary risks domestically.

– International concerns remain, which should be monitored.

Positive Outlook for the New Year
Despite the real risks that remain for markets and the economy, the overall outlook remains positive as we head into the new year. Market fundamentals and technicals ended the year on a high note with a return to earnings growth and solid technical support toward year-end. Additionally, economic fundamentals continue to show signs of a healthy, expanding economy which should set the stage for continued market gains in 2024.

Consumer spending remained impressively resilient throughout most of 2023 and improved consumer confidence at year-end should support continued spending in 2024. Business confidence and spending also showed signs of solid growth to end the year. Looking forward, we appear poised for continued positive economic and market performance in the months ahead.

There are real risks to this outlook that remain. Inflation, the Fed, and rising geopolitical risk remain front of mind as we head into the new year but other risks may develop as well.

It’s important to remember that even in strong years for markets, investors can face a bumpy ride along the way. Going back to 1980, the average intra-year price decline (the average annual price decline from peak-to-trough during the year) for the S&P 500 was 14.2 percent, while the average annual return was 9 percent. This means that even though the S&P 500 averaged high single-digit annual returns over this time, periods with selloffs were a common feature almost every year. This was true in 2023, as the S&P 500 fell by 10 percent from peak-to-trough during the year but ended the year up more than 26 percent on a total return basis.

Given the history of volatility for equity markets and the potential for short-term uncertainty due to the risks markets face, a well-diversified portfolio constructed to withstand bouts of market turbulence remains the best path forward for most investors. If concerns remain, you should reach out to your financial advisor to discuss your financial plans.

Disclosure: 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.

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

Markets Rebound in January

Markets rallied to start the year, with all three major U.S. indices seeing positive returns in January after experiencing declines in 2022. The S&P 500 rose 6.28 percent, the Dow Jones Industrial Average rose 2.93 percent, and the technology-heavy Nasdaq Composite led the way with a strong 10.72 percent gain. Equity markets were supported by falling long-term interest rates.

These positive returns came despite weakening fundamentals. Per Bloomberg Intelligence, as of January 31, 2023, with 45 percent of companies having reported actual earnings, the average earnings decline for the S&P 500 in the fourth quarter of 2022 was 2.3 percent. Although this is slightly better than the 3.3 percent decline forecasted at the start of earnings season, if earnings decline for the fourth quarter, it would represent the first quarter with a year-over-year decline since the third quarter of 2020. Analysts are currently forecasting continued earnings declines in the first half of 2023 as well. Fundamentals drive long-term market performance, so the weakness in earnings should be monitored.

While fundamentals were not supportive, technical factors were another story. All three major U.S. indices ended the month above their respective 200-day moving averages, which marked the first month that all three have finished above trend since December 2021. The 200-day moving average is a widely monitored technical indicator, as prolonged breaks above or below trend can signal shifting investor sentiment for an index. Although a one-month trend is not enough to say that investors are now bullish on U.S. equities, technical support to start the year was still an encouraging sign for investors.

The story was similar with international markets in January. The MSCI EAFE Index of developed international companies gained 8.10 percent while the MSCI Emerging Markets Index increased 7.91 percent. Falling interest rates and reopening efforts in China helped support international stocks to start the year. Technical factors were also supportive during the month, as both the developed and emerging market indices finished the month above their respective 200-day moving averages. This represents the first time that the MSCI Emerging Markets Index has finished a month above trend since June 2021.

Bond markets also had a strong start to the year. Long-term rates fell in January, as the 10-Year U.S. Treasury yield declined from 3.88 percent at the end of December to 3.52 percent at the end of January. This helped support bond prices as the Bloomberg U.S. Aggregate Bond Index gained 3.08 percent. High-yield bonds were also up to start the year. The Bloomberg U.S. Corporate High Yield Bond Index gained 3.81 percent in January. High-yield credit spreads tightened, which indicates that investors grew more comfortable with taking on additional credit risk at lower yields.

Falling Rates Support Markets

The solid start to the year for investors was due in large part to declining interest rates during the month. The drop in rates was in turn driven by signs of slowing inflation and expectations for slower rate hikes this year. Headline producer and consumer prices both declined in December, with the monthly drop in prices supporting slowing year-over-year price growth. Inflation is high on a year-over-year basis, but the December price reports showed encouraging signs of declining price pressure across the economy. Economist and consumer forecasts call for continued slowing inflation throughout the year, which is another positive sign that efforts to contain price growth are paying off.

Cooling inflation helped support increased investor expectations for a slowdown in the pace of Federal Reserve (Fed) rate hikes in 2023 compared to 2022. Futures markets project one additional 25 basis point (bp) hike this year following the 25 bps hike in February and the 4.25 percent of rate hikes we saw in 2022. If expectations prove to be accurate, it would represent a notable slowdown in the pace of rate hikes.

Economic Growth Slows

While the slowdown in inflation was a good sign for the economy and investors, other economic data reports released during the month showed signs of a continued economic slowdown. Consumer spending fell for the second consecutive month to end 2022, and business confidence and investment also slowed at year-end. Given the signs of economic slowdown, it’s possible that we’ll enter a recessionary environment at some point this year. That said, if we do see a recession in 2023, it’s expected to be mild.

Job growth remained strong at the end of 2022, which should help support the economy in the case of a potential recession. Consumer confidence also showed signs of improvement toward the end of last year and start of this year. The University of Michigan consumer sentiment index finished January at its highest level since April 2022, signaling increased consumer optimism to start the year. Improved consumer sentiment has historically supported consumer spending growth, so this confidence is another encouraging signal that economic fundamentals are relatively healthy despite the recent slowdown.

Additionally, a further slowdown in economic growth could encourage the Fed to keep rate hikes this year to a minimum, which would again support markets. Ultimately, while no one roots for a recession, relatively healthy economic fundamentals indicate that a recession in 2023 would likely be mild and could benefit investors and the economy in the long run.

One sector that’s seen a notable slowdown already is the housing sector. Housing sales continued to fall at year-end, due to high prices and mortgage rates along with a lack of supply of homes for sale. As you can see in Figure 1, the annualized pace of existing home sales fell throughout the course of last year, with the December result bringing the pace of sales to its lowest level since 2010. The housing sector will be important to monitor going forward as housing costs make up a large portion of consumer inflation. The slowdown in housing sales has been challenging for prospective home sellers over the past year. We started to see signs of declining housing prices toward year-end, however, which could help support slower inflation later this year if the trend continues.

Figure 1. Total Existing Home Sales, Seasonally Adjusted Annualized Rate, 2010–Present

Risks Remain

It was a positive start to the year for investors, but there are very real market risks to monitor. The primary risk here in the U.S. is political, as the debt ceiling confrontation is set to drive uncertainty for markets and the economy until it’s resolved. While we’ve seen similar standoffs in the past that have been resolved before a potential government default, this process could play out over the course of several months and markets would likely face additional volatility if a compromise cannot be reached in a timely manner. Investors will also be keeping an eye on equity fundamentals given the expected earnings decline in the fourth quarter and analyst forecasts for continued earnings declines in the first half of 2023.

International risks should also be monitored as uncertainty overseas remains. Even though the direct market impact from the Russian invasion of Ukraine declined throughout 2022, the continued conflict could lead to further flare ups and uncertainty for the region and investors. Additionally, China’s efforts to reopen its economy bear watching, as any slowdown in the reopening process could spook investors.

It’s also important to remember that other risks might materialize and negatively impact markets at any time. Last year was a good example of the impact that unknown risks present, as the Russian invasion of Ukraine and the surge in inflation year drove investors across asset classes into the red. The market impact from those risks diminished but serve as a reminder that we may see further turbulence ahead.

Ultimately, there are a number of risks for investors as we kick off 2023. On the whole, however, the picture is relatively positive. While there is certainly the potential for short-term market turbulence in the months ahead, the relatively solid economic backdrop should help support long-term performance. Given the prospects for more short-term uncertainty, a well-diversified portfolio that matches investor goals with timelines remains the best path forward for most. As always, you should reach out to your financial advisor to discuss your current plan if you have concerns.

All information according to Bloomberg, unless stated otherwise.

Disclosure: 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.

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 Brad McMillan, CFA^®, CAIA, MAI, managing principal, chief investment officer, and Sam Millette, manager, fixed income, at Commonwealth Financial Network^®.

© 2023 Commonwealth Financial Network^®

Presented by Mark Gallagher                                  

General Market News

• The Federal Reserve (Fed) increased its policy rate by 25 basis points (bps) at last week’s Federal Open Market Committee (FOMC) meeting, bringing the target range between 4.5 and 4.75 percent. This marks a slowdown in pace for the Fed’s rate hikes, but Chairman Jerome Powell aimed to avoid giving any indication that the job was close to done. “Inflation data received over the past three months shows a welcome reduction in the monthly pace of increases,” Powell said in his post-meeting press conference. “And while recent developments are encouraging, we will need substantially more evidence to be confident that inflation is on a sustained downward path.” While acknowledging that, “We can now say, I think for the first time, that the disinflationary process has started,” he went on to note that it would be “very premature to declare victory or to think we really got this.” U.S. Treasury yields changed modestly over last week. The 2-year and 5-year gained 2 bps to (4.2 percent) and 6 bps (to 3.66 percent), respectively. The 10-year and 30-year fell 12 bps (to 3.39 percent), and 8 bps (to 3.54 percent).
• The Russell 2000 and Nasdaq Composite indices led the way last week as investors interpreted the FOMC’s January rate decision. The slower increase of 25 bps from December was just half of December’s increase of 50 bps. While widely expected, the market rallied on the FOMC slowing its pace of rate increases. The slower pace led investors to speculate that the Fed was near the end of its quest of taking policy actions to tame inflation. The top-performing sectors were communication services, technology, and consumer discretionary. This came as Meta Platforms (META) announced a greater reduction of expenses by $5–10 billion and a $40 billion stock buyback plan. Technology and consumer discretionary moved higher despite weakness in Amazon and Apple earnings. Sectors that struggled last week included energy, utilities, and health care. Stocks closed lower on Friday as stronger-than-expected employment report gave the Fed an additional reason to continue rate hikes.
• Last week was a busy one in terms economic policy and releases. Tuesday saw the release of the Conference Board’s Consumer Confidence Index for January. Consumer confidence declined modestly during the month, but the index remained well above the recent low of 95.3 that it hit in July 2022. Consumer views on the present economic situation improved to start the year; however, souring expectations lead to a headline decline for the index.
• The FOMC announced its federal funds rate decision on Wednesday. The Fed hiked the federal funds rate by 25 bps at its February meeting, which was in line with investor and economist expectations.
• Friday wrapped with the employment report and ISM Services index for January. Hiring surged past expectations in January, with 517,000 jobs added during the month against calls for a more modest 188,000 additional jobs. The unemployment rate also unexpectedly declined to a 53-year low of 3.4 percent to start the year. Service sector confidence rebounded notably in January following a sharp decline in December, driven by increased demand for services, as new orders and business activity improved.
  

  Equity Index	Week-to-Date	Month-to-Date	Year-to-Date	12-Month
  S&P 500	1.64%	1.48%	7.86%	-6.57%
  Nasdaq Composite	3.33%	3.65%	14.77%	–14.12%
  DJIA	–0.15%	–0.47%	2.44%	–1.28%
  MSCI EAFE	0.46%	0.88%	9.05%	–3.07%
  MSCI Emerging Markets	–1.18%	0.70%	8.65%	–12.44%
  Russell 2000	3.90%	2.79%	12.81%	0.60%

  Source: Bloomberg, as of February 3, 2023

  Fixed Income Index	Month-to-Date	Year-to-Date	12-Month
  U.S. Broad Market	–0.05%	3.02%	–7.56%
  U.S. Treasury	–0.22%	2.28%	–7.91%
  U.S. Mortgages	0.06%	3.36%	–6.77%
  Municipal Bond	0.12%	2.99%	–3.59%

  Source: Bloomberg, as of February 3, 2023

   

  What to Look Forward To

  This week will be on the lighter side in terms of economic data. Tuesday will see the release of the trade balance and consumer credit reports. The monthly trade deficit is expected to widen in December following a larger-than-expected tightening in November.

   

  Finally, the week will wrap Friday with the University of Michigan consumer sentiment survey. Consumer sentiment is expected to increase modestly, which would mark three consecutive months of improving confidence.

   

  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 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.

  © 2023 Commonwealth Financial Network^®