Weekly Market Update, November 16, 2015

Presented by Mark Gallagher

General market news
• Rates declined last week, as commentary from various Federal Open Market Committee (FOMC) members slightly decreased market expectations for a potential hike in interest rates in December. The yield on the 10-year Treasury was 2.25 percent early Monday morning, below last Monday’s level of 2.36 percent. The 30-year, which stood at 3.13 percent last Monday, opened at 3.05 percent on November 16.
• U.S. equity markets fell last week, snapping a six-week winning streak.
• The Russell 2000 Index was the worst performer. Tepid retail spending by U.S. consumers hit the index, which has a lot of domestic exposure, particularly hard.
• Elsewhere, shares in emerging markets sold off, as increasing odds of a December rate hike in the U.S. pushed the MSCI Emerging Markets Index lower.


Equity Index Week-to-Date Month-to-Date Year-to-Date 12-Month
S&P 500 –3.56% –2.58% 0.06% 1.25%
Nasdaq Composite –4.22% –2.38% 5.22% 6.49%
DJIA –3.64% –2.18% –1.16% 0.17%
MSCI EAFE –1.71% –3.21% –0.62% –2.55%
MSCI Emerging Markets –3.66% –3.12% –12.05% –14.82%
Russell 2000 –4.40% –1.25% –3.75% –1.01%

Source: Bloomberg


Fixed Income Index Month-to-Date Year-to-Date 12-Month
U.S. Broad Market –0.61% 0.53% 1.27%
U.S. Treasury –0.73% 0.69% 1.50%
U.S. Mortgages –0.41% 1.27% 1.93%
Municipal Bond –0.36% 1.80% 2.74%

Source: Morningstar Direct

What to look forward to
We will shift our attention to consumer-level inflation this week and are expecting headline prices to firm a bit.

We will also gain insight into manufacturing activity with releases of Industrial Production and the Philadelphia Fed Business Outlook Survey.

Data on Housing Starts and the latest FOMC meeting minutes will be released midweek.

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.


Mark Gallagher is a financial advisor located at Gallagher Financial Services at 2587 East 7th Ave, 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.

© 2015 Commonwealth Financial Network®