Weekly Market Update, June 13, 2016

Presented by Mark Gallagher

General market news
• The 10-year and 30-year Treasuries both opened Monday morning at their lowest levels of the year, with yields of 1.63 percent and 2.44 percent, respectively. Yields fell after the German 10-year bond hit an all-time low of 0.02 percent last week, sparking concerns.
• Domestic stocks drifted lower last week but experienced some wide swings in trading. The S&P 500 Index was within 11 points of an all-time high on Wednesday before a large sell-off on Friday dragged it back below 2,100. Emerging markets bucked the trend and posted strong returns on improved economic outlooks.
• The only major economic release last week was the University of Michigan Consumer Sentiment figure for June, which came in slightly lower than the May report. Overall, consumer sentiment remains relatively strong.


Equity Index Week-to-Date Month-to-Date Year-to-Date 12-Month
S&P 500 –0.11% 0.02% 3.59% 1.76%
Nasdaq Composite –0.95% –1.06% –1.61% –2.29%
DJIA 0.35% 0.51% 3.86% 1.91%
MSCI EAFE 0.34% 0.57% –0.18% –8.39%
MSCI Emerging Markets 2.69% 3.86% 6.29% –11.96%
Russell 2000 0.01% 0.83% 3.12% –6.76%

  Source: Bloomberg


Fixed Income Index Month-to-Date Year-to-Date 12-Month
U.S. Broad Market 0.99% 4.48% 5.40%
U.S. Treasury 1.19% 4.32% 5.59%
U.S. Mortgages 0.38% 2.67% 4.14%
Municipal Bond 0.72% 3.44% 7.09%

  Source: Morningstar Direct


What to look forward to
There will be plenty of economic data to watch this week. The Federal Reserve is widely expected to keep rates the same during its June meeting, with the announcement released Wednesday.

We will also gain insight into inflation with releases of May Consumer and Producer Price Index data.

Retail Sales are expected to have been more muted in May, while Industrial Production is expected to have dropped.

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.


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®