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Weekly Market Update – July 22, 2016

The Dow finished 54 points higher on Friday as the market dipped from its record highs earlier this in week. For the week the Dow was up 0.3%. Year-to-date the index is up 6.6%.

Domestic economic data came in mixed. Jobless claims continued to impress, dropping to a three-month low of 253,000 for last week. The Philly Fed manufacturing indexed missed expectation, coming in at -2.9 vs. the +4.5 consensus. Existing home sales for June rose 1.1% to a 5,570,000 seasonally adjusted annual rate. According to FactSet, the earnings of the 123 companies in the S&P 500 index are on track to contract 4.2% and corporate profits are expected to fall 5.3% in the second quarter. Despite global economic uncertainty caused by the UK’s vote to exit the European Union (“Brexit”), Federal Reserve officials are optimistic about an interest-rate increase before the end of this year, possibly as soon as September. For the week, the U.S. Preferred Stock Index is flat.

Although the market has stabilized after the initial uncertainty from Brexit, its impact on the global economy remains unclear. Concerns of reduced investments in the Eurozone and increased market volatility resulted in a 0.2% decrease in Eurozone growth forecast for the next two years according to experts surveyed by the European Central Bank. The projected Eurozone growth now stands at 1.4% for 2017 and 1.6% for 2018. We continue to trim our European bank exposures in portfolios.

Corporate earnings will make news next week as Apple, Facebook, and Alphabet (Google) release Q2 revenues and earnings. Next week’s economic calendar highlights include Consumer Confidence and New Home Sales (Jul 26th), Crude Inventories and Federal Open Market Committee (FOMC) Interest Rate Decision (Jul 27th), Initial Jobless Claims (Jul 28th), and Chicago PMI (Jul 29th). The FOMC meeting will have the greatest impact on the market.

Have a great weekend,

Yansong Pang (庞岩松)


Ulland Investment Advisors

4550 IDS Center · Eighty South Eighth Street · Minneapolis MN 55402 · Telephone: 612-312-1400 · Facsimile: 612-204-3464