The markets rebounded today, but ended the week down overall. The S&P 500 gained 0.8%, the Dow gained 0.99%, and the Nasdaq gained 1%. This was not enough to overcome the weaknesses of Monday, Tuesday and Thursday, which we can attribute to the standard cocktail of a corporate behemoth (Apple) weighing down an entire sector and geopolitical risk hotspots Russia and the Middle East, along with a general weakening trend in the markets. From a technical perspective we have seen volatility increase in both directions over the course of the last two weeks, which is negatively impacting an already mixed market trend. Small-cap stocks continue to under perform large-cap stocks. This is noteworthy to those of us in the large-cap world because trends in small-caps can find their way up the ladder to the world of large-caps. In addition, when the major market indices have gone higher, indeed reaching new highs, there have been fewer and fewer stocks participating in the new upside, with fewer and fewer stocks making new highs. This sort of technical trending gives us caution going into the year-end. From an economic fundamentals standpoint, there is reason for optimism that the overall uptrend will continue, albeit with periods of pullback. After a dismal Q1 GDP number, US economic activity expanded at an annualized rate of 4.2% in the second quarter, with recently released data on services consumption expected to cause that number to be revised upwards to 4.5%. Currently, the Q3 is on track to expand at an annualized 3.5%. Should this trend continue we can expect continued downward pressure on unemployment, and potential upward pressure on service sector inflation. Over the past several years, disinflation in goods pricing and general stability in services pricing has kept inflation quite low. While we do not anticipate rising inflation because goods pricing has stabilized and services pricing is rising. Furthermore, the Fed is scheduled to concluded its asset purchasing program and begin moving towards more normalized monetary policy. Timing-wise, the consensus is that first rate increase will occur at the June 2015 FOMC meeting, which if correct would mean that the economy has continued to expand. Next week’s data to watch include Monday’s Personal Income and Outlays report, Wednesday’s ISM Manufacturing Index, and Thursday’s Jobless Claims report.