11 River Basin Lane, North Yarmouth, Maine 04097 United States
tel: 207-846-8787
toll free: 855-440-0010

Preston Galarneau
Deborah Galarneau

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Newsletter Quarter 2, 2016

Second Quarter Newsletter 2016


As we write this we are more than half way through summer and the weather in Maine has been beautiful. While it has been very dry, we have had our share of sudden and violent thunderstorms. One day during our July vacation at the lake heat and humidity built all day, storm clouds gathered and thunder could be heard in the distance. The meteorologists predicted strong storms in the early evening. Yet, dark clouds gave way to sunshine and we enjoyed watching from our deck as ducks caught their dinner and local fisherman cast their lines. Much later, after 10:00 at night, and when we least expected it, a frightful storm hit, soaking everything with rain. Lightening cascaded down on the lake steadily for some 20 minutes, striking several trees and knocking out power. It was fortunate that we had secured our table top umbrellas before going inside earlier in the evening.

The markets seem to be in a similar pattern this summer: a series of sunny days, a breakthrough to new all-time highs in July, calm in reacting to events many expected would be problematical; but subject to sudden scary and unanticipated storms which do their damage, then quickly pass. There have been a number of positive earnings reports this summer and on 8/5 the Jobs Report* showed healthy growth with unemployment at 4.9%. Brexit took many of us by surprise, creating quite a storm around the world. Yet, the market picked itself up, shook off the rain and made new highs.

On the bond front, fallout from Brexit and a continued weak global economy can be seen in Government Bond yields published by Bloomberg for the period ending June 30th**. Many countries including Germany, Japan, France, Switzerland, Italy and Spain had government bond yields below 0% on 1-3 year maturities. The Fed seems to have signaled that a U.S. rate hike will be pushed back until the impact of Brexit has become clearer. U.S. Fixed Income, especially bonds of high quality, offer alternative yields comparted to most other developed countries.

The search for yield has been good news for income stocks, such as utilities and REITS. We continue to monitor the technical of our income stocks, and to look for candidates with strong dividend histories and sustainable business growth. While we haven’t seen much excitement in the markets over recent weeks, we don’t take the calm weather for granted. We will be on the lookout for approaching disturbances and be prepared to take action.

Our new office construction is coming along nicely and on schedule. We are posting photos of the progress on our website; check them out under the Resources/Latest News Tab at www.galarneaugroup.com. It looks as though we will be ready to move in during early September. We will keep you all posted and give you plenty of advance notice before the move. Our toll-free number (855-440-0010) will remain the same.

We are pleased to sponsor The Portland Chamber Music Festival again this summer. The Festival will be held 8/11-20 at the Abramson Center on the USM Portland Campus. Cantella will also hold its Annual Conference on 9/7-9, in Massachusetts. Our office will be closing early on Thursday, 9/8 and will be closed Friday, 9/9. You will still be able to reach us by telephone during normal business hours all 3 days, by dialing our regular numbers.

Enjoy the rest of your summer and please take time to relax with friends and family. We appreciate your business and your trust and look forward to seeing you all later in the year at our new office!



The Galarneau Group


*Source: Yahoo Finance, Economic Calendar

**Source: Bloomberg

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