As proof, the Dow moved above the 18,000-point mark; the S&P 500 posted its best week since late March, up 2.41%; and the Nasdaq, powered by Google, reached a new all-time high.

Of course, Greece was still in the news, albeit without the extra added drama of do-or-die ultimatums and down-to-the-wire negotiations. Having begun the week by accepting strict austerity terms in exchange for a third bailout of €86 billion, Prime Minister Alexis Tsipras began to push the new measures through parliament, but not without collateral damage as members of his own party voted against the plan, leading him to shuffl e his cabinet. The harsh medicine that Greece is now adopting is far more distasteful than what was rejected in a national referendum just two weeks earlier, and includes higher taxes, reduced pensions, spending cuts, and the supervised sale of public assets to create a collateral fund of €50 billion.

The vote, as The New York Times put it, approved new austerity steps “virtually guaranteeing that life would get harder for millions of Greeks,” and the former Finance Minister Yanis Varoufakis likened the plan to the infamous Treaty of Versailles, designed to punish Germany after WWI. Tsipras tried to defl ect some of the heat by focusing on the larger share that will have to be carried by Greece’s oligarchs, saying, “This time, those who got away in the past will shoulder the burden.”

Germany’s parliament also approved bailout negotiations, a move endorsed by Chancellor Angela Merkel in what she styled a “last attempt” to help Greece, though a number of her fellow party members likewise deserted her. Then on Friday, the European Union approved a €7 billion bridge loan to help Greece make the payments it has recently missed, and the European Central Bank increased its emergency lending line by €900 million, allowing Greece’s banks to reopen today, though with limits on foreign transfers. This being Greece, not everything went forward without a hitch.

for a change, American investors turned their attention to their own economy – and they liked what they saw.

With the Greeks not hogging all of the headlines

MARKET COMMENTARY FOR THE WEEK OF JULY 20, 2015

Key Market DataWeek ending… 7/10/2015 7/17/2015 Change YTD One

YearS&P 500 Index 2,076.62 2,126.64 +2.41% +3.29% +8.61%

MSCI EAFE Index 1,851.94 1,889.50 +2.03% +8.68% -0.12%

BarCap U.S. Aggregate Bond Index

1,906.79 1,913.66 +0.36% -0.0068% +1.899%

10-year Treasury Note Rate

2.415% 2.349% -6.6 basis pts

+4.427% +9.693%

Trending • Retail sales fell -0.3% after rising 1% in May.

• The Nasdaq ends the week at a record high of 5,210.14.

• Housing starts jump 9.8% in June, building permits increase 7.4%.

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NORTHWESTERN MUTUAL WEALTH MANAGEMENT COMPANY

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The International Monetary Fund said it wouldn’t sign off on the bailout unless Greece was given some form of debt relief, with proposals ranging from reduced principal to a 30-year extension on debt payments. Germany’s Finance Minister Wolfgang Schäuble continued to raise hackles, implying that the best way for Greece to work off its debt might be by leaving the eurozone for a while.

Google itThough S&P Capital IQ estimates that second quarter earnings will fall 4.5% from a year earlier, the week saw a run of positive reports from GE, JPMorgan Chase, Bank of America, Citigroup, Netfl ix, and, above all, Google. On Thursday, the internet giant’s earnings exceeded expectations for the fi rst time since 2013, and the investor response was emphatic: Google’s stock soared 16% on Friday as the stock hit a new high, adding $65 billion in market value and moving the company into second place behind Apple, as measured by market capitalization.

Starts and permits surgeInvestors were also encouraged by strong numbers for both housing starts and building permits in June, though much of the surge was the result of multi-family units, not the closely watched single-family homes. Housing starts jumped 9.8% to an annualized rate of 1.17 million, with apartment complexes soaring 28.6%, the fastest pace in 28 years; single family starts fell 0.9% from May. Building permits increased 7.4% to an annual rate of 1.34 million, their highest level since July 2007.

Yellen visits CongressJanet Yellen, the chairwoman of the Federal Reserve, appeared on Capitol Hill last week, with House republicans pushing her to make the Fed more transparent, while Senate democrats urged her to hold off on raising the benchmark rate until next year. Yellen resisted both entreaties, telling the House, “Eff orts to further increase transparency, no matter how well intended, must avoid unintended consequences

MARKET COMMENTARY FOR THE WEEK OF JULY 20, 2015

that could undermine the Federal Reserve’s ability to make policy in the long-run best interests of American families and businesses.” As for the rate hike, she went so far as to say, “There are risks from waiting too long to act as well,” adding, “My own preference would be to proceed to tighten in a prudent and gradual manner.”

The defi cit dipsThe federal government posted a surplus in June of $51.8 billion, and over the fi rst nine months of the fi scal year the defi cit is $313.4 billion, down 14.3% from a year earlier. The forecast for the full year is $486 billion, comparable to last year, but well below the $680.2 billion in 2013 and trillion-dollar defi cits from 2009 to 2012. In other economic news, the Commerce Department said that retail sales fell 0.3% in June after a 1% gain in May – it was the weakest showing since February.

The Producer Price Index rose 0.4% in June, mainly because of gas prices, up 4.3%; core prices, less food and gas, increased 0.3%. The Consumer Price Index was up 0.3%; core prices rose 0.2%. First-time jobless claims fell 15,000 to 281,000 as the four-week average increased 3,250 to 282,500. Industrial production improved 0.3% in June after having fallen 0.2% in May, and capacity utilization came in at 78.4% after 78.2% in May. Lastly, business inventories were up 0.3% in May after gaining 0.4% in June.

A look aheadThis week will be a comparatively quiet one for economic news, with updates on existing and new home sales, Markit’s Manufacturing PMI, and the Conference Board’s Index of leading economic indicators, as well as more second-quarter earnings reports.

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MARKET COMMENTARY FOR THE WEEK OF JULY 20, 2015

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Indexes and/or benchmarks are unmanaged and cannot be invested in directly. Returns represent past

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