Newsletter Second Quarter 2014

We hope you are enjoying your summer with friends and family. As we look back on the second quarter we continue to see mixed signals from the economy and the markets. The stock market overall turned in a strong performance for the second quarter. Economic news from the Fed released on July 30, showed an annualized growth rate of 4%. This contrasts with the 2% decrease in growth previously reported for the winter.

While the Government released positive numbers for real estate growth in the second quarter, it reported earlier in the week that new home sales dropped by 8% for the month of June. In addition, the Federal Reserve report, following its two day meeting in Washington this week, highlighted both falling unemployment figures and a statement that many Americans continue to be underemployed.

Analysts are watching for upcoming earnings reports in the Retail sector. Retailers had a strong showing in the second quarter; and consumer spending numbers were up. There is concern however, that new earnings reports may be disappointing and could signal the start of a downward trend in Retail.

Studying what has already happened is of course useful, but cannot predict what is about to happen. As we watch the future unfold, our work is not to predict what the markets will do, but to manage risk. That means we will be prepared to take defensive action when risk appears to be increasing, in an individual stock or sector, or the market as a whole.

Enjoy the rest of the summer; and know that we are watching the markets for you, and are prepared to respond.

Warmly,

The Galarneau Group Wealth Management Team