Weekly Market Update, September 29, 2014

Presented by Mark Gallagher

General market news
• The 10-year Treasury opened lower for the second consecutive week, with a yield of 2.51 percent, down from 2.57 percent last week and 2.62 percent the previous week. The yield on the 30-year Treasury, which stood at approximately 3.38 percent last week, its highest level since early summer, was back down to 3.18 percent Monday morning.
• A 0.80-percent rally for the S&P 500 on Friday wasn’t enough to offset weakness earlier in the week, and the index ended up declining 1.34 percent. Higher-beta indices such as the MSCI Emerging Markets and the Russell 2000 fared significantly worse, with losses of 2.65 percent and 2.34 percent, respectively.
• The third quarter comes to an end this week, which means earnings season is just around the corner. Investors are eagerly anticipating the latest news on earnings strength and corporate outlooks for the rest of the year, but reporting season also brings with it some added volatility.


Equity Index Week-to-Date % Month-to-Date % Year-to-Date % 12-Month %
S&P 500 –1.34% –0.89% 8.91% 19.15%
Nasdaq Composite –1.46% –1.43% 9.01% 20.65%
DJIA –0.96% 0.17% 5.02% 14.25%
MSCI EAFE –1.53% –2.62% 0.42% 5.45%
MSCI Emerging Markets –2.65% –5.53% 4.62% 5.11%
Russell 2000 –2.34% –4.55% –2.88% 5.15%

Source: Bloomberg


Fixed Income Index Month-to-Date % Year-to-Date % 12-Month %
U.S. Broad Market –0.69% 4.31% 4.17%
U.S. Treasury –0.74% 3.55% 2.72%
U.S. Mortgages –0.20% 4.15% 3.82%
Municipal Bond 0.01% 8.19% 8.61%

Source: Bloomberg


What to look forward to
The week will kick off with the release of Personal Income data, which is expected to show an increase.

On Tuesday, analysts expect to see a year-over-year decrease in the S&P/Case-Shiller home price index. On the heels of that data will come ISM Manufacturing and Non-Manufacturing numbers, as well as Factory Orders, which are expected to decrease.

The week will end with a report on the Employment situation, which analysts predict will remain unchanged.

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 Avenue, 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.

© 2014 Commonwealth Financial Network®