Presented by Mark Gallagher
General market news
• Treasury rates were higher heading into the Federal Open Market Committee (FOMC) meeting last week, with the 10-year as high as 2.29 percent. After the Fed’s decision to keep rates at current levels, however, the 10-year dropped back down and was as low as 2.12 percent early Monday morning.
• One interesting item to note from last week’s Fed meetings was a suggestion from one Fed member that we might see a negative rate in the future—something the Fed has been reluctant to allow in the past.
• Global equity market performance was mixed last week, as investor concerns over a potential increase in the federal funds rate contributed to volatility in the markets.
• The MSCI Emerging Markets Index was the top performer during the week; the FOMC decision to keep rates at current levels helped alleviate concerns of a strengthening dollar for the time being.
|MSCI Emerging Markets||3.29%||1.42%||–11.43%||–19.38%|
Source: Morningstar Direct
|Fixed Income Index||Month-to-Date||Year-to-Date||12-Month|
|U.S. Broad Market||0.56%||1.01%||3.09%|
Source: Morningstar Direct
What to look forward to
The week will begin with housing market data and the releases of Existing and New Home Sales numbers, followed by Durable Goods Orders, which are expected to be down after posting solid increases in the previous month.
The final estimate of second-quarter Gross Domestic Product (GDP) is expected to be unchanged at 3.7 percent.
The final reading of the University of Michigan Consumer Confidence measure for September is expected to bounce back after an unexpected decrease in the preliminary estimate for the month.
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 2586 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®