Now What: A Guide to Retirement During Volatile Times

Up, Down, Up… What Now?

In its longest winning streak since January, the S&P 500 has rallied for four straight weeks, adding 14% in October alone. According to a Bloomberg article published on Saturday, this puts the index on track for its biggest monthly gain since 1974! The Dow Jones Industrial Average similarly scored an 11% gain this month and just logged its fifth week of gains.

In comparison with the near 20% decline we saw during July and August, it certainly seems like the stock market has a split personality. What‘s causing all these ups and downs? While many factors are at play, the market moved downward over the summer based primarily on two assumptions:

1) That the U.S. was entering another recession.

2) That the Eurozone financial system was on the verge of collapse.

When neither of these things occurred, investors became uncertain – waiting and watching every headline for signs of what would come next. This led to the heightened levels of volatility we experienced in September.

What led to the rally? Frankly, the crisis atmosphere has died down. European Union leaders announced a “deal” on debt crisis measures early Thursday that aims to resolve issues in Greece, instability in the banking sector, and their sorely deficient bailout fund. Equities also climbed after the government announced that the U.S. economy expanded 2.5% in the third quarter; its fastest pace in a year.

So are we out of the woods? Not completely. We are wise to temper our expectations for the moment, as many details about Europe’s plan and how it will be implemented still remain unsettled. Other factors are also worth keeping an eye on. Earnings season is still under way, and 100 more companies are set to report this week. The nation’s highly anticipated jobs report, due Friday, will be in focus. And as the Federal Reserve concludes its two-day meeting on Wednesday, investors will be watching for signals regarding whether a third round of quantitative easing, or QE3 is on the way.

As always, we pledge to monitor the relevant issues, and to keep you informed about any factors that have the potential to shape your financial future.

ECONOMIC CALENDAR:
Monday – Chicago PMI
Tuesday – Motor Vehicle Sales, ISM Manufacturing Index, Construction Spending
Wednesday – ADP Employment Report, FOMC Meeting Announcement
Thursday – Jobless Claims, Productivity and Costs, ECB Announcement, Factory Orders, ISM Non-Manufacturing Index,
Friday – Employment Situation


HEADLINES:
Treasury 30-year bonds dropped for a fifth week, the longest skid in more than two years, as a deal reached by European leaders to tame the region’s debt crisis fueled appetite for higher-yielding assets.

Europe’s appeal for Chinese help has come under fierce criticism for potentially weakening their negotiating position in political and economic disputes with Beijing. On Sunday, Eurogroup chairman Jean-Claude Juncker said it made sense for China to invest its surplus in Europe to help the region overcome its debt crisis, but this would not involve political concessions.

As stimulus funds dry up, cash-strapped states are facing steep rises in Medicaid spending, forcing them to slash services and trim costs. States will have to spend another 28.7% on Medicaid this fiscal year - by far the largest increase ever, according to new data released by the Kaiser Family Foundation Thursday.

Sales of new homes, a benchmark indicator both for the housing market and the overall economy, rose slightly but remained slow in September. Sales reached a 313,000 annual rate in September, 5.7% more sales than the revised estimate for August, according to a monthly report from the Census Bureau released Wednesday. But sales were off 0.9% compared with 12 months earlier.

QUOTE OF THE WEEK:
‘You are never too old to set another goal or to dream a new dream.” Les Brown

To think about:
It’s important to focus on one thing at a time. Even in the Roman times they understood this with their Proverb ‘The man who chase two rabbits catches none.”


RECIPE OF THE WEEK:
From Marcello’s
Penne Vodka e Radicchio


Penne Vodka e Radicchio
Penne with Pink Vodka Sauce and Radicchio, Serves 4
4 tbsp. extra virgin olive oil
2 small shallots, chopped
2 oz. Parmigiano Reggiano or Grana Padano
1/4 stick of butter
4 oz. heavy cream
1 lb. penne pasta
1 lb. radicchio, julienne
1 oz. vodka
2 cups tomato sauce
pinch of Italian red pepper
pinch of fresh parsley
In medium pan, sauté shallots and radicchio in butter and olive oil. Stir for 2-3 minutes. Add red pepper and vodka and flame it.
Gradually add tomato sauce and heavy cream. Cook for 10 minutes over low flame. Cook pasta and cook until al dente. Drain and stir in sauce. Garnish with Parmigiano and parsley.
Wine suggestion: Valpolicella/Amarone or one of Marcello’s favorites: Allegrini Palazzo della Torre


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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.
Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.

Europe vs. Earnings for the markets

It’s an interesting time for the stock market. We’re in the middle of a healthy earnings season, economic news is modestly positive, and yet, investors can’t pull their eyes away from the drama in Europe.

On average, 60% of companies in the S&P 500 are beating earnings estimates since the reporting season began this month, and numbers for revenue are coming in even better. The number of people claiming unemployment benefits declined this week, housing construction picked up last month (at least for apartment buildings), and inflation remains low. Add to this the fact that many analysts are saying stocks are undervalued right now , and it would have been reasonable to expect a stock market rally last week. Instead, what we got was a roller coaster ride that eventually ended the week virtually flat. The Dow and S&P rose a little over 1%, while the Nasdaq fell 1%.

Europe is clearly dominating investor sentiment right now, leaving the markets vulnerable to every shred of bad news. With good news, we see stocks push upward. With bad news, they pull back. All of this pushing and pulling is keeping stocks in somewhat of a no man’s land where valuations look good but global economic concerns are scaring people away from them. At the moment we seem to be in a trading range.
Meanwhile, European leaders are scrambling to solve the crisis. And while the outcome of all their meetings is impossible to predict, expectations for a bold and reasonable plan are high. If a concrete plan comes together, it is likely that the markets will respond positively. If a plan doesn’t come together, the bumpy ride will probably continue.

While progress in Europe has been painfully slow, it is starting to look like their leaders are taking things more seriously. If nothing else, most would agree that we are closer to the end of this crisis than to the beginning. And that is definitely good news!

ECONOMIC CALENDAR:
Tuesday – S&P Case Shiller HPI, Consumer Confidence
Wednesday – Durable Goods Orders, New Home Sales
Thursday – GDP, Jobless Claims, Pending Home Sales Index
Friday – Personal Income and Outlays, Employment Cost Index, Consumer Sentiment


HEADLINES:
On Friday, President Obama announced that the United States would withdraw its forces from Iraq by the end of the year. Although the most heart-wrenching costs of the Iraq war come in the form of human lives, Obama's decision is also a major step toward putting the United States on a more sustainable fiscal path.
The U.S. Senate adopted a measure on Thursday that would raise the maximum size of a home loan backed by mortgage companies Fannie Mae, Freddie Mac, and the Federal Housing Administration to $729,750.

The Occupy Wall Street protests are rapidly spreading around the world. St. Paul's Cathedral has closed to the public because Occupy London Stock Exchange protesters camped outside, church officials said Friday.

Federal Reserve officials are starting to build a case for a new program of buying mortgage-backed securities to boost the economy, though they appear unlikely to move swiftly. The idea would be to target any new efforts by the central bank at the parts of the economy that are most severely impeding a recovery – the housing and mortgage markets – by working to push down mortgage rates.

QUOTE OF THE WEEK:

“Those who start with too litte money are more likely to succeed than those who start with too much.Energy and imagination are the springboards to wealth creation. “
Brian Tracy

RECIPE OF THE WEEK: From Marcello’s in Suffern
Tiramisu

1 lb. mascarpone cheese or cream cheese, plain
4 egg yolks
1 cup marsala wine, or any sweet wine
4 tbsp. sugar
10 oz. ladyfingers, or spongecake
3 cups espresso, or verystrong black coffee
cocoa to decorate
Mix sugar, marsala and eggs in copper bowl or double boiler and cook for 5 minutes. Let cool. This mixture is called zabaglione.
Blend the mascarpone cheese with the zabaglione until smooth.
Spread 1/3 of the cream mixture in the bottom of a square pan 2” deep. Dip the ladyfingers individually in espresso and place uniformly on top of cream mixture. Add another 1/3 of cream mixture and repeat another layer of ladyfingers. Add the last of the cream and refrigerate for 3 hours. Cut into squares and sprinkle with cocoa powder.

From Ken’s book Now What? A guide to Retirement during volatile times

Not Your Father's Retirement
Unlike your parents’ generation, most baby boomers have had more than one job or career, and don’t have a generous pension plan to fall back on at retirement. While the post war baby boomers do have some investments that were unknown to previous generations, like Roth IRAs and 401(k) plans, your parents had a safety net, while you must fly solo.

Overall, you’ll live longer and healthier lives than your parents, so you’ll need money for a longer period of time. To further complicate your financial burdens, you may have your own parents and children to care for and help support.

And you’ll likely have more energy and time for living out your personal retirement dreams, unlike many of our parents, who didn’t live long enough, or healthy enough, to enjoy their Golden Years to the fullest. You also have end of life decisions, needs, and opportunities that no generation before yours could benefit from ... or had to face.

Fill (Not Kill) Your Time
“Nobody on his deathbed ever said, ‘I wish I had spent more time at the office.’”
-- Paul Tsongas, the late senator from Massachusetts

Without the structure of that office where you dutifully reported 5 days a week … or more … you’ll have a lot of time on your hands, and a lot less that you have to do with it. Now that you can finally choose how you’ll spend your time, will you choose a new career, a part-time job, leisurely hours on the golf course, a stint back at school, volunteer work, travel, or all of the above?

Who you spend your time with matters as much as how you choose to spend that time. Sometimes, in the rush to succeed, we forget to involve our loved ones in the day to day activities of our working lives, or invest our time and energy in those people and things that matter most to us

Making the most of your relationships with loved ones now, be they friends or family, young or old, can make a huge difference in the quality of your retirement years. In the end, folks with close ties to family and friends tend to live longer, happier lives ... no matter how rich or poor they may be.



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!

If you would like to opt-out of future emails, please reply to this email with UNSUBSCRIBE in the subject line.
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.
Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.
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.

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by ken | 09:09 in |

Is the market ready for a comeback?

Just a couple of weeks ago, on October 3rd, the S&P 500 was down 12.6% for the year and things weren’t looking too good for a comeback. Since that time, it has trimmed the loss to only 2.6% and needs to gain just 33 points to get above the 1,257 where it started the year. If the S&P 500 finishes this year with a gain, it will be its biggest comeback since 1984!

What has caused this turnaround? One reason is that investors are becoming more confident that Europe will protect its banks from huge losses on Greek bonds if that country fails to make good on its debt. Another reason is that many people still think stocks are undervalued and that company earnings are going to be better in the third quarter than many analysts expect.

Since July, analysts have continually cut their earnings estimates based on fears that the U.S. is heading into a recession. Much to their surprise though, positive reports on retail sales, applications for unemployment benefits, and the number of jobs added in August have been better than expected. So while some have been pricing the market in expectation of the worst, things haven’t been as bad as many expected.
Seasonal investor behavior could also be at play here. If you look at the 30-year time period from 1981-2010, you will find that the average price return for the S&P 500 Index has been 7.14%. While this is significant, it is even more impressive that the index ended positive 24 out of 30 years, or 80% of the time! "Positive market psychology hits a fever pitch as the holiday season approaches and does not begin to wane until the spring," according to the Stock Trader's Almanac.

While Europe’s debt problems still aren’t solved, and it is definitely too early to count on gains for the year, we are happy to see this positive momentum in the stock market and hope it continues.

ECONOMIC CALENDAR: Monday – Empire State Mfg Survey, Industrial Production
Tuesday – Producer Price Index, Treasury International Capital, Housing Market Index, Ben Bernanke Speaks at 1:15 PM ET
Wednesday –Consumer Price Index, Housing Starts, EIA Petroleum Status Report, Beige Book
Thursday – Jobless Claims, Existing Home Sales, Philadelphia Fed Survey, Leading Indicators

Data as of 10/14/2011 1-Week YTD 1-Year 5-Year 10-Year
Standard & Poor's 500 5.98 -2.63 4.33 -2.07 1.22
Dow 4.88 0.58 4.93 -0.53 2.46
NASDAQ 7.60 0.56 9.55 2.63 5.66
MSCI EAFE 6.41 -8.74 -7.08 -2.96 2.64
10-year Treasury Note (Yield Only) 2.07 N/A 2.49 4.81 4.66

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. N/A means not available.

HEADLINES:

Earnings season is in full swing as the week ahead includes reports from nearly half of the Dow's 30 components, including Intel, McDonald's, and General Electric, and 96 members of the S&P 500 including, Apple, Southwest Airlines, and Chipotle Mexican Grill. S&P 500 company earnings are expected to have climbed 23% in the third quarter of 2011, according to earnings tracker Thomson Reuters. Revenues of the companies in the benchmark index are expected to have risen 10%.

France and Germany have less than a week of frantic negotiation ahead to resolve key differences on a “comprehensive plan” to end the Eurozone sovereign debt crisis after the world’s leading finance ministers put the ball firmly in their court over the weekend. The Group of 20 richest nations told the Eurozone that by the European summit next Sunday it should: agree on the losses the private sector should take on Greek debt; arrange a credible plan for the recapitalization of Europe’s banks; and install a firewall to protect other countries from Greece’s woes.

Throngs of Apple fans lined up in the wee hours Friday outside the company's flagship store in Manhattan to be among the first to get their hands on the new iPhone 4S. Two hours before Apple's new smartphone was slated to go on sale, hundreds of aspiring buyers filled the plaza outside the Fifth Avenue glass cube, echoing scenes that had already played out earlier in the day in Australia, Japan, Germany, France, and other Apple stores around the world.

Investors are hoping for a 4th quarter rally


The S&P 500 has produced a positive total return in the 4th quarter (i.e., October-November-December) in 16 of the last 20 years (i.e., 1991-2010), including a +10.7% gain last year. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market (source: BTN Research).

The Bureau of Labor Statistics released its monthly Employment Situation Summary on Friday, and the data conclusively proves that the U.S. is not in a recession. To many the data would seem to indicate that it also shows that the odds of entering into one are much lower than some reports in the media might suggest.

Nonfarm payroll employment edged up by 103,000 in September, and increased by 202,000 if you include upward revisions for July and August. This significantly outpaced consensus expectations of a mere 60,000 gain. And while the report reflected the return of about 45,000 Verizon workers who had been on strike in August, the increases are still significant. Also striking is the fact that the number of weekly hours per worker increased from 34.2 to 34.3. While that may not seem like much of a jump, it is actually the equivalent of adding 320,000 jobs!

If you take a look at the jobs numbers over the past year, you will see that private sector payrolls have grown by 1.8 million, the workweek has lengthened, and hourly wages are up 1.9%. And while we acknowledge that the labor market is still far from operating at an optimal level, we are definitely seeing improvement!

As we hope this positive trend in hiring will continue, only time will tell if it can be more than a momentary bright spot. In the weeks ahead, investors will be looking for signs on the health of the economy from corporate earnings and what is still the biggest elephant in the room: Europe’s debt crisis. We will continue to monitor developments in these and other areas and will work diligently to keep you informed.

ECONOMIC CALENDAR: Monday – U.S. Holiday: Columbus Day
Tuesday – FOMC Minutes
Thursday – International Trade, Jobless Claims, EIA Petroleum Status Report, Treasury Budget
Friday – Retail Sales, Import and Export Prices, Consumer Sentiment, Business Inventories

Data as of 10/07/2011 1-Week YTD 1-Year 5-Year 10-Year
Standard & Poor's 500 2.12 -8.12 -0.22 -2.88 0.78
Dow 1.74 -4.10 1.41 -1.26 2.17
NASDAQ 2.65 -6.54 4.01 1.56 5.44
MSCI EAFE 2.51 -14.2 -10.8 -3.51 2.32
10-year Treasury Note (Yield Only) 1.92 N/A 2.40 4.70 4.50

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. N/A means not available.

HEADLINES:
Steve Jobs, the co-founder and board chairman of one of the world’s greatest companies, will long be remembered as a remarkable man. We have truly lost a great visionary who enriched the lives of millions by means of technology. Born in 1955 to a world of rotary phones and room-sized computers, he left behind a world where over 100 million people carry a small device called an iPhone – which is both a phone and a computer – in their pockets. Steve Jobs is a man who will unquestionably be missed.

Business-jet sales may increase worldwide starting in 2012 as emerging-market demand picks up. Purchase expectations are growing in Asia, followed by the Middle East and Africa, while the free-fall in developed markets like North America following 2008’s recession has stabilized, according to an annual survey of 1,500 companies by Honeywell International Inc., a New Jersey-based avionics and cockpit-instruments maker.

Consumers cut their borrowing in August by the most in 16 months. Fewer people used their credit cards. And a measure of demand for auto and student loans fell. Total borrowing dropped $9.5 billion in August, the Federal Reserve said last week. In July, borrowing increased $11.9 billion.

While the nation added jobs last month, public schools lost 24,400 positions – the most of any category. Local government in total shed 35,000 jobs. Teachers continue to get pummeled as state and local governments digest budget cuts for fiscal 2012, which began in July in most states.

QUOTE OF THE WEEK:

Worse Quarter since the Fall 2008, What’s next?

The Market had it’s worse quarter since 2008. The leading averages have now been down five months in a row. The S&P 500 lost 14% for the 3rd quarter. European markets lost 23% for the same period. Here is a recap of the past 3 months:

July – After a volatile first half that eventually ended U.S. stocks in positive territory, the debt ceiling debate quickly took center stage. As policymaker’s debated ways to cut spending and raise the nation’s borrowing limit, stock markets faltered.

August – Following an eleventh hour debt ceiling compromise, Italy rose to the forefront of debt problems in Europe and anemic economic news pushed investor sentiment downward. As fear dominated the markets, major indexes erased their gains for the year during the first week of the month. Hitting especially close to home, S&P downgraded the nation’s bond rating from AAA to AA+ on August 5th.

September – After a brisk market rally early in the month, European debt woes dominated investor sentiment once again. By the middle of the month, tables turned dramatically as many asset classes experienced their worst weeks in years. Even gold faced its largest monthly fall since October 2008. In conjunction with persistent concerns about European debt and a weakening U.S. economy, the Fed's Open Market Committee (FOMC) launched “Operation Twist” on September 21st, leading to further selloffs.

In reading the quick summary above, it’s easy to see why investors could be forgiven for feeling somewhat dazed and confused. The last three months have been rough. The stream of bad news coupled with occasional flickers of optimism led to one of the most volatile periods ever for stocks. The Dow moved more than 200 points on 18 separate times during the quarter, swinging by more than 400 points on four consecutive days in August alone. When you couple the nauseating stock market performance with anxiety about the European sovereign-debt crisis and headlines forecasting a double-dip recession, it’s no wonder people are running scared.
Now What?

While past performance doesn’t guarantee future results, some investors are taking comfort in the fact that the third-quarter, historically, has been the worst of the year, and the fourth-quarter is typically the best. And while some are finding it difficult to be optimistic, others are turning their sights to corporate earnings for a barometer of where the economy is headed. Companies will start releasing their third-quarter reports in coming weeks.

Interestingly, the third-quarter edition of the Investment Manager Outlook (a survey of investment managers conducted by Russell Investment Group and released 9/29) found that 78% of managers do not expect the U.S. to slide into a double-dip recession. “Strong corporate balance sheets and high corporate profits should ensure that the United States avoids a new recession. However, Russell also believes, along with the majority of the managers surveyed, that we will see a slow-growth trend for the next several years, as well as ongoing market volatility,” the report stated. We agree with this assessment.

As long as confidence in the global economy and government policymakers remains shaky, markets are likely to be volatile. Even so, we still believe that fundamentals are strong in many areas, and we know that successful investing is a long-term project undertaken with risk and uncertainty. Equity markets do not move in a straight line, and neither do economic recoveries. Despite being painful, volatile periods like this historically run their course and then come to an end.
We understand that fear can be contagious, but we urge you not to let yourself be overtaken by it. While many types of investments are currently experiencing a difficult period, we believe that those who remain committed to their long-term investment plan will be rewarded over time.

If you have any questions or would like any guidance, please don’t hesitate to reach out to us. We consider it a great privilege to help you protect what you’ve worked hard to earn.

ECONOMIC CALENDAR: Monday – ISM Mfg Index, Construction Spending
Tuesday – Motor Vehicle Sales, Factory Orders
Wednesday –ADP Employment Report, ISM Non-Mfg Index, EIA Petroleum Status Report
Thursday – BOE Announcement, ECB Announcement, Jobless Claims
Friday – Employment Situation
Data as of 09/30/2011 1-Week 3Q YTD 1-Year 5-Year 10-Year
Standard & Poor's 500 2.11 -14.3 -7.73 1.68 -2.63 1.15
Dow 3.55 -12.1 -3.66 3.39 -0.90 2.61
NASDAQ -0.10 -12.9 -6.49 4.73 1.97 6.55
MSCI EAFE 4.81 -17.8 -13.4 -7.33 -3.26 2.64
10-year Treasury Note (Yield Only) 1.81 N/A N/A 2.52 4.63 4.57

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. N/A means not available.

HEADLINES:

According to a Bloomberg Gallup Poll, 63 % of global investors approve of President Barack Obama's plan to tax people with annual incomes of $1 million or more. The so-called Buffett rule is a nod to investor Warren Buffett and his New York Times op-ed piece calling on the wealthy to pay their fair share.

Consumers made less money and spent less money in August, according to a report released Friday. The Commerce Department said personal income declined by 0.1% in August. Consumer spending rose just 0.2%, and was flat when adjusted for inflation.

An examination of credit-rating agencies by the Securities and Exchange Commission staff found repeated instances of the companies failing to follow their own procedures or adequately manage conflicts of interest, according to an S.E.C. staff report issued Friday. The examinations were mandated in the Dodd-Frank regulatory law passed last year after numerous investigations into the causes of the financial crisis. Several of those inquiries found that the rating agencies issued inaccurate reports, failed to report or manage conflicts of interest, and put generating revenue ahead of rigorous financial analysis.

Eurozone inflation has surged unexpectedly to a three-year high of 3%, adding to the dilemma facing the European Central Bank as an escalating debt crisis pushes the region towards recession.