It’s a small world after all… By Ken Mahoney

People around the world are arguably more connected now than any other time in history. During the past hundred years, remarkable advances in science, trade, and technology have drawn us closer together. Just 15 years ago, who would have thought we would be able to use our mobile devices to video conference with individuals on the other side of the world? So many things that once seemed impossible have now become everyday occurrences. And yet, this trend toward globalization has also raised significant challenges – some of which we are battling right now.

In recent days, news sources have been commenting on how developments abroad could affect the condition of the U.S. Economy. For example, a FOX News headline from Saturday read: International Crises Threaten to Overshadow Obama's Economic Message , and TIME Magazine online asked Sunday: Will North Korea's Artillery Blast the Global Economy? As these headlines emphasize, the actions of our distant neighbors give many pause for concern. How should we react to such news?

Back in the spring, you may recall that problems in Greece and the so-called PIIGS (Portugal, Ireland, Italy, Greece, Spain) countries caused markets around the world to fall and raised fears of a global double-dip recession. Before long though, the Greek bailout plan and the establishment of a European bailout fund quieted those fears for a time and the markets experienced a nice summer rally. Or you may recall back in March that North Korea sank a South Korean naval vessel, but there was no medium or long-term damage done to either the economy of South Korea, the U.S., or the wider East Asian region. What do these examples teach us?

There will always be bad news to shake up the stock market and rattle investors. And while past performance is no guarantee of future results, declines are historically followed by advances. And, of course, hindsight is always 20/20. When it comes to investing, there are no crystal balls. It is for this reason that we are wise to maintain a long-term approach, stay focused on our objectives, diversify as much as possible, and make adjustments where necessary.

In a way, the words of White House chief spokesman Robert Gibbs on Tuesday capture the essence of the point we are trying to make. Speaking about how the time Obama spends focused on international issues could distract from time spent working on the domestic economy, he said: "there are events that happen like North Korea that you have to address as they happen, not how you would plan for them to happen."
Please rest assured that we are ever alert to the changing world scene, and that we will keep you informed about events that could affect you and adjustments that should be made.

Data as of 11/26/2010 1-Week Y-T-D 1-Year 5-Year 10-Year
Standard & Poor's 500 -0.86 6.66 7.09 -1.24 -1.14
Dow -1.00 6.37 6.00 0.29 0.59
NASDAQ 0.65 11.7 16.5 2.40 -1.27
MSCI EAFE -4.15 -0.71 0.90 -0.51 0.88
10-year Treasury Note (Yield Only) 2.88 N/A 3.45 4.43 5.62

Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized.
Sources: Yahoo! Finance, MSCI Barra. Past performance is no guarantee of future results.
Indices are unmanaged and cannot be invested into directly. NA means not available.


HEADLINES:

Online sellers kick off the week with one of their biggest sales days of the year - Cyber Monday. E-tailers consider it their version of Black Friday. It is the day that Web merchants furiously push big discounts, free gift cards, free shipping and any other gimmick they can think of to entice consumers to spend even more of their holiday shopping dollars online.

ComScore, a digital marketplace research firm, expects online sales for the 2010 holiday season will reach $32.4 billion, marking an 11% increase over the previous year for the combined November-December gift-buying period.

Billionaires Warren Buffett and Bill Gates said Sunday in addition to their enormous philanthropic contributions, they are willing to pay higher U.S. taxes. The pair appeared on ABC's "This Week" to discuss "The Giving Pledge," a program that recruits the wealthy to donate at least half of their wealth to philanthropic causes, which if successful would raise $600 billion. "The rich are always going to say … just give us more money, and we'll go out and spend more, and then it will all trickle down to the rest of you, but that has not worked the last 10 years, and I hope the American public is catching on," Buffett said.

The pound posted its biggest weekly drop against the dollar in more than six months as concern that China is moving to slow its economy and tensions between North and South Korea diminished demand for riskier assets. The pound dropped to $1.5602 as of 4:30 p.m. in London yesterday, a weekly decline of 2.4%. It’s the third weekly decline against the dollar in a row and the biggest since the week ending May 7.




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Insert your broker/dealer disclosures here. i.e. Securities offered through “Your B/D Name Here,” Member FINRA/SIPC.

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq. The DJIA was invented by Charles Dow back in 1896.
The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indexes from Europe, Australia and Southeast Asia.
The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
Google Finance is the source for any reference to the performance of an index between two specific periods.
Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
Past performance does not guarantee future results.
You cannot invest directly in an index.
Consult your financial professional before making any investment decision.
These are the views of Platinum Advisor Marketing Strategies, LLC, and not necessarily those of the named representative or named Broker dealer, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.

Goldilocks, where are you? Some country’s economies are too hot, or too cold…

Last week drew attention back to the health of the global economic recovery as the Dow fell 2.2%, the Nasdaq slid 1.5%, and the S&P slumped 1.2%, for their biggest point and percentage drops in three months.

The week’s downturn can be largely attributed to ongoing concern about Europe’s debt crisis, particularly in Ireland, and to the fact that China is considering policies to slow its economic growth in order to counter inflation. Speculation that these new policies will decrease China's demand for natural resources resulted in a decline among materials and energy stocks, as well as crude oil prices.

On the bright side, although these losses end a five-week winning streak, the S&P 500 still closed above its 200-week moving average for the second week in a row – something that has not happened since mid-June 2008.

Also last week, the U.S. government embarked on its second round of quantitative easing (QE2) in response to slow employment growth, global economic concerns, and fears of deflation. On Friday the Federal Reserve purchased $7.3 billion of the $600 billion in securities slated for purchase through June 2011. QE2 is intended to increase the supply of money and lower interest rates in an effort to prompt spending and boost available credit.

Critics contend that the Fed’s plan will increase financial speculation and produce inflation, while its positive impact on average consumers will be limited. To date, commodity prices have soared in response to QE2, with wheat, corn, cotton, sugar and coffee — all broadly used consumer items — listed among the gainers. One concern about this is that any permanent rise in costs for basic goods will be passed on to consumers. Foreign governments, including China, are also concerned about the manipulation of U.S. currency, leading to fears about a drop in foreign Treasury buying. To critics, Fed Chairman Ben Bernanke counters that the Fed's job is to focus on the U.S. economy, not everyone else's.

While the U.S. monitors overseas financial policy, foreign markets watch U.S. economic policy to determine their level of investment. As your financial advisors, we must do something similar when making decisions about what is best for you. As technology and trade increasingly connects our world, it becomes ever more critical for us to remain sensitive to changing global economic issues, as well as current U.S. policies, and to keep you informed about how such factors could affect the health of your investments. This weekly email update is one of the ways we aim to educate you about such matters. We hope you enjoy reading it.

ECONOMIC CALENDAR:

Monday – Retail Sales, Empire State Manufacturing Survey, Business Inventories
Tuesday – Producer Price Index, Treasury International Capital, Industrial Production, Housing Market Index
Wednesday – Consumer Price Index, Housing Starts, EIA Petroleum Status Report
Thursday – Jobless Claims, Leading Indicators, Philadelphia Fed Survey, EIA Natural Gas Report

Data as of 11/12/2010 1-Week Y-T-D 1-Year 5-Year 10-Year
Standard & Poor's 500 -2.17 7.54 10.3 -0.58 -1.22
Dow -2.20 7.33 9.76 0.95 0.56
NASDAQ -2.36 10.9 17.2 2.87 -1.69
MSCI EAFE -2.97 3.18 3.16 0.50 0.83
10-year Treasury Note (Yield Only) 2.54 N/A 3.45 4.56 5.80

Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized.
Sources: Yahoo! Finance, MSCI Barra. Past performance is no guarantee of future results.
Indices are unmanaged and cannot be invested into directly. NA means not available.

HEADLINES:

President Obama has identified another big goal for the upcoming lame duck session of Congress: The pending Strategic Arms Reduction Treaty with Russia. The START treaty, which has been pending in the Senate for months, would reduce the limit on strategic warheads to 1,550 for each country from the current ceiling of 2,200. It also would set up new procedures to allow both countries to inspect each other's arsenals to verify compliance.

Germany is pressing Ireland to seek aid before a Nov. 16 meeting of European finance ministers to calm market volatility and win agreement on making investors help pay for future bailouts, a German government official said Saturday.

Buyers spent over $2 million at an auction of ponzi schemer Bernie Madoff's stuff on Saturday. Ruth Madoff's 10.5-carat diamond engagement ring went for just over half a million, a lot containing those sweet monogrammed slippers went for $6,000, and for some reason a middle-aged man from Long Island paid $1,700 for "a batch of Bernie's unused boxers and socks." He told the Post, "They are brand new so I don't have to buy socks for the next two or three years. I don't really know about the boxers. I just bought it for the socks."

This Thursday is the day when President Obama and the Democratic and Republican leadership on Capitol Hill meet to formally kick off negotiations about possible compromises over the extension of the Bush tax cuts, which are set to expire Dec. 31.






Share the Wealth of Knowledge!
Please share this market update with family, friends, or colleagues. If you would like us to add them to our list, simply click on the "Forward email" link below. We love being introduced!.


Insert your broker/dealer disclosures here. i.e. Securities offered through “Your B/D Name Here,” Member FINRA/SIPC.

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq. The DJIA was invented by Charles Dow back in 1896.
The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indexes from Europe, Australia and Southeast Asia.
The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
Google Finance is the source for any reference to the performance of an index between two specific periods.
Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
Past performance does not guarantee future results.
You cannot invest directly in an index.
Consult your financial professional before making any investment decision.
These are the views of Platinum Advisor Marketing Strategies, LLC, and not necessarily those of the named representative or named Broker dealer, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.

How will the ‘shift in power’ of congress affect investors? by Ken Mahoney

Republicans have seized control of the House and increased their presence in the Senate. How will this shift in power affect investors? We can only speculate.

Thankfully, we aren’t completely in the dark when speculating, as history provides some clues. While we cannot possibly discuss the potential impact on every type of investment in this brief commentary, let’s focus on two; stocks and bonds.

STOCKS:
It is commonly held that Republicans are “business friendly”, and thus good for the stock market when they are the controlling party, but there is no solid data to back this up. Additionally, stock returns in years when power is split between the White House and Congress show no clear pattern. Some historical averages however, are interesting to note. Since 1945, the Standard and Poor's 500 index has gained 4% in years when Congress was split between parties, 8% when Congress was controlled by one party but the White House another, and 11% when a single party was in control of Washington.
Also noteworthy though, is an observation made by the Wall Street Journal while commenting on the future of the stock market in light of recent election results: “Watch out for anyone who tells you "divided government is good for the stock market. The historical basis for this – such as data since 1949 via the Stock Trader's Almanac – Is meager. You can't extrapolate universal rules from such a small amount of data.”

BONDS: Two months ago, the GOP issued their 48-page Pledge to America. In it, they laid a plan for trillions in tax cuts, but few intentions to cut spending. Where bonds are concerned, if taxes are cut and deficits rise, the government will likely issue more bonds. The result could be a depression in prices and an undermining of confidence in federal finances. While this scenario wouldn’t be so bad if bonds were already cheap, it is a concern when bond prices are high as they are right now.

One thing is certain – 2011 will be an interesting year. The President’s party no longer has control of Congress. It will be the second year of a slow economic recovery, and one year before the next presidential election. With so many economic and policy issues remaining uncertain, the way politicians handle their responsibilities will be closely scrutinized.

In summary, it is important to remember that when it comes to investing (and politics for that matter), forecasting the future is impossible. At best we can speculate calculatedly. As your financial professionals, it is our job to stay alert to critical changes that could impact your portfolio, and to make necessary adjustments so you can stay on track with your long-term goals. You could say that’s our Pledge to You.

ECONOMIC CALENDAR:
Tuesday – Redbook
Wednesday – International Trade, Jobless Claims, EIA Natural Gas Report, EIA Petroleum Status Report, Treasury Budget
Thursday – U.S. Holiday – Veterans Day
Friday – Consumer Sentiment

Data as of 11/05/2010 1-Week Y-T-D 1-Year 5-Year 10-Year
Standard & Poor's 500 3.60 9.93 14.9 0.09 -1.41
Dow 2.93 9.74 14.4 1.73 0.58
NASDAQ 2.85 13.6 22.5 3.78 -2.53
MSCI EAFE 3.84 5.74 8.16 1.09 0.86
10-year Treasury Note (Yield Only) 2.61 N/A 3.53 4.66 5.80

Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized.
Sources: Yahoo! Finance, MSCI Barra. Past performance is no guarantee of future results.
Indices are unmanaged and cannot be invested into directly. NA means not available.

HEADLINES:
Government-controlled mortgage buyer Fannie Mae is asking for $2.5 billion in additional federal aid after posting a narrower loss in the third quarter. Fannie Mae also said Friday it was likely that the market disarray and suspension of foreclosures due to big lenders' problems with flawed documents will have a negative impact on the delinquency rates of its loans, its expenses and foreclosure timelines.

U.S. securities regulators are close to approving a plan to ensure markets remain liquid even in times of crisis, the chairman of the Securities and Exchange Commission said on Friday. At a meeting to discuss the May "flash crash" that sent the Dow Jones industrial average into a brief 700-point freefall, SEC chief Mary Schapiro and other regulators were zeroing in on new rules to prevent another uncontrollable market plunge.

MSNBC host Keith Olbermann was suspended indefinitely without pay for making political donations in violation of the channel’s policies. “I became aware of Keith’s political contributions late last night,” Phil Griffin, president of MSNBC, said today in an e-mail. “Mindful of NBC News policy and standards, I have suspended him indefinitely without pay.”

Friday’s Labor Department report showed that the United States economy added 151,000 jobs in October. It was certainly a welcome change after four months of job losses but not strong enough to make a dent in unemployment. Nearly 15 million people are still out of work, and the unemployment rate remains at 9.6 percent.



Share the Wealth of Knowledge!
Please share this market update with family, friends, or colleagues. If you would like us to add them to our list, simply click on the "Forward email" link below. We love being introduced!.


Insert your broker/dealer disclosures here. i.e. Securities offered through “Your B/D Name Here,” Member FINRA/SIPC.

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq. The DJIA was invented by Charles Dow back in 1896.
The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indexes from Europe, Australia and Southeast Asia.
The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
Google Finance is the source for any reference to the performance of an index between two specific periods.
Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
Past performance does not guarantee future results.
You cannot invest directly in an index.
Consult your financial professional before making any investment decision.
These are the views of Platinum Advisor Marketing Strategies, LLC, and not necessarily those of the named representative or named Broker dealer, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.

Earnings, Earnings, Earnings, and Elections
By Ken Mahoney

In real estate, we are taught over and over again it's “location, location, location”. Well for particular stocks, stock sectors and stock markets, it should be “earnings, earnings, earnings”.

While there are a number of factors that may affect the stock market including government policy, interest rates and investor confidence, these factors always impact earnings. And this past earning season seems to have done pretty well.

As we know from history, October can be spooky and we’re not talking just about Halloween. Ironically, it’s been during October that we’ve seen particularly scary stock markets with the October 1929 crash, the October 1987 crash and the October 2008 crash. At this moment however, the stock market has some strength and momentum. There are a number of reasons why the stock market may have momentum now including perhaps another round of quantitative easing, and maybe a more business friendly Congress. And perhaps it's earnings.

Many people don’t understand the disconnect between Wall Street and Main Street, especially while Main Street is still suffering. Daily we hear reports about housing foreclosures and high unemployment. What we don’t pay enough attention to is what is happening overseas - PIIGS (Portugal, Italy, Ireland, Greece, and Spain) saddled with too much debt, economic and social unrest and their attempts to deal with that debt. That story played out very strongly this past summer as the U.S. markets were powerfully impacted by those conditions.

In addition, I don't think enough attention is paid to BRIC (Brazil, Russia, India, and China). These countries are growing. U.S. companies penetrating and selling to those markets are doing very well. According to some reports, S&P 500 companies earn more than 40% of their profits overseas. So, when you scratch your head to try to understand how the stock market is doing well despite our lows here in the U.S., maybe if you look at abroad you can understand why this is all happening and that's because companies are getting their earnings, earnings, earnings from overseas.

October provided another example that the stock market and the economy do not always move in tandem. For the month, the Dow posted its best October since 2006, rising 3%, the S&P advanced 4%, and the Nasdaq leapt 6% . Meanwhile, the government’s initial reading on Gross Domestic Product – the broadest measure of the economy – showed that the current recovery is still one of the weakest in generations.

For three months ending in September, GDP grew at an annual rate of only 2%. During the past 30 years, the average growth rate during a U.S. economic expansion has been 3.6%. During the end of 2009, growth was as strong as 5%. In light of these figures, the past two quarters have been understandably disappointing (2Q growth was 1.7%). What do these numbers mean in plain English? On the bright side, they mean the economy isn’t shrinking; or worse, freefalling, as some naysayers have predicted. They also show that we are moving in the right direction – even a 0.3% increase is worth noting. From another perspective though, the lackluster growth we are seeing is too slow to bring down the unemployment rate, and likely too slow to keep the Federal Reserve from intervening with another round of quantitative easing.

Even as voters hit the polls Tuesday, the Fed’s FOMC (Federal Open Market Committee) is set to convene its 8th meeting of the year. As investors digest election results the following day, economists expect the Fed to announce plans stimulate the economy with another $500 billion to $1 trillion injection.

Also anticipated this week is the government’s closely watched jobs report due Friday. Employers are expected to have added 45,000 jobs in October, and the unemployment rate is projected to hold at 9.6%. Since the jobs report comes out after the Fed’s plans for quantitative easing are announced, investors will surely be analyzing it for signs as to whether QEII was warranted.
Between the election, the Fed’s FOMC meeting announcement, and the jobs report, the first week of November will be a busy one.

ECONOMIC CALENDAR:

Monday – Personal Income and Outlays, ISM Manufacturing Index, Construction Spending
Tuesday – Motor Vehicle Sales
Wednesday – ADP Employment Report, Factory Orders, ISM Non-Manufacturing Index, EIA Petroleum Status Report, FOMC Meeting Announcement
Thursday – BOE Announcement, Jobless Claims, Productivity and Costs, ECB Announcement, EIA Natural Gas Report
Friday – Pending Home Sales Index, Employment Situation, Consumer Credit

Data as of 10/29/2010 1-Week Y-T-D 1-Year 5-Year 10-Year
Standard & Poor's 500 0.02 6.11 10.9 -0.25 -1.42
Dow -0.13 6.62 11.6 1.38 0.50
NASDAQ 1.13 10.5 19.5 4.00 -2.35
MSCI EAFE -0.49 2.25 5.46 0.57 0.75
10-year Treasury Note (Yield Only) 2.56 3.84 3.50 4.57 5.71

Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized.
Sources: Yahoo! Finance, MSCI Barra. Past performance is no guarantee of future results.
Indices are unmanaged and cannot be invested into directly. NA means not available.

HEADLINES:

Monster Worldwide (jobs website operator) reported third-quarter results Thursday that easily topped forecasts, and the company raised its fiscal outlook. During the company's conference call, Monster CEO Sal Iannuzzi said that "while economies still aren't as strong as any of us would like to see them around the world, they are picking up." He added that "the momentum clearly in Europe, United States, North America and Asia is significantly more positive than it was a year ago."

For the school year 2010-11, in-state tuition and fees at public four-year colleges and universities rose to $7,605, up 7.9% from a year ago, the College Board reported Thursday. At private four-year institutions, the average cost rose 4.5% to $27,293.

September’s new-home sales climbed 6.6% from a month earlier to a seasonally
adjusted annual rate of 307,000 the Commerce Department said Wednesday. When compared to a year earlier, the rate tumbled 21.5%. September saw the fourth-worst monthly reading since 1963, though these statistics are notoriously prone to later revisions.

Two packages found on cargo flights from Yemen bound for the U.S. contained explosive material, President Barack Obama said Friday, after U.S. and European authorities went on high alert following the discovery of the parcels. President Obama said authorities had uncovered a “credible terrorist threat.” Both packages were addressed to Jewish organizations in Chicago.