Presented by Mark Gallagher
General market news
• After hitting a new historical low of 1.32 percent on Wednesday, behind a lot of buying momentum from the holiday-shortened week, the 10-year Treasury yield opened early Monday morning at 1.36 percent. The 30-year yield also reached a new low last Wednesday and yet another early Monday at 2.08 percent. Negative yields around the world are pushing investors to buy U.S. Treasuries.
• Equity markets continued their strong post-Brexit rebound last week, and the S&P 500 Index closed at a new all-time high after a gain of 1.33 percent. Technology stocks posted the largest returns, with the Nasdaq Composite Index up 1.96 percent. News of increased global stimulus from central banks, as well as a strong U.S. jobs report, fueled the gains.
• The big economic news last week was the much stronger-than-expected employment report for June, which was especially encouraging after the disappointing results for April and May. Those reports were also revised higher, suggesting recent concerns over a weakening jobs market may be overblown.
| Equity Index | Week-to-Date | Month-to-Date | Year-to-Date | 12-Month |
| S&P 500 | 1.33% | 1.55% | 5.45% | 6.38% |
| Nasdaq Composite | 1.96% | 2.39% | –0.28% | 2.33% |
| DJIA | 1.16% | 1.29% | 5.66% | 6.40% |
| MSCI EAFE | –2.30% | –1.55% | –5.53% | –8.54% |
| MSCI Emerging Markets | –1.37% | –0.76% | 5.71% | –5.95% |
| Russell 2000 | 1.80% | 2.24% | 4.49% | –2.73% |
Source: Bloomberg
| Fixed Income Index | Month-to-Date | Year-to-Date | 12-Month |
| U.S. Broad Market | 0.81% | 6.16% | 7.20% |
| U.S. Treasury | 0.82% | 6.23% | 7.44% |
| U.S. Mortgages | 0.16% | 3.27% | 4.80% |
| Municipal Bond | 0.27% | 4.61% | 7.90% |
Source: Morningstar Direct
What to look forward to
The focus this week will be June inflation data, with releases of Producer and Consumer Price Indices.
Retail Sales are expected to have been a bit more muted in June after the previous increase.
The week will end with data on Industrial Production and Consumer 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 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.
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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.
© 2016 Commonwealth Financial Network®