2012 off to a good start for US Stocks
Are you getting used to writing 2012 on your checks yet? The first nine days of the new year have sure flown by! After all the hustle and bustle of the holiday season, we hope you’re settling back into a normal routine, and that your first week of 2012 has been a good one.
We’re happy to report that it was a good week both for stocks and positive U.S. economic news. Stocks kicked off the year on a high note as the Dow Jones industrial average added 1.2%, the S&P 500 gained 1.6%, and the Nasdaq led with a 2.7% rise. As far as the economy is concerned, employment figures and purchasing manager surveys released last week suggest the U.S. experienced healthy growth in December.
Despite positive news, the tone on Wall Street has remained cautious and trading volumes have been low. Many investors, it seems, are still torn between rising hopes for the U.S. economy, and the ever-evolving European debt saga. And there is still considerable debate over whether stronger jobs and manufacturing numbers should be attributed to a seasonal holiday binge, or something more permanent. Ultimately, only time will tell.
The week ahead promises to be a busy one as the unofficial start of corporate earnings season kicks off. We’ll wait to see what corporate leaders have to share, but overall, it is expected to be a strong season. The companies in the S&P 500 are forecast to be up 7.5% in the final three months of 2011, versus the same period one year ago, and sales are predicted to have risen 8.6% for the quarter, according to research from S&P Capital IQ. While the European debt situation will probably weigh most heavily in the headlines, it will have to share the spotlight with corporate earnings.
With one week down and 51 to go, we’re off to the races, as the old saying goes. Whatever this year brings, we look forward to running alongside you every step of the way!
ECONOMIC CALENDAR:
Monday – Consumer Credit
Tuesday – Redbook, Wholesale Trade
Wednesday – EIA Petroleum Status Report, Beige Book
Thursday – Jobless Claims, Retail Sales, Business Inventories, Treasury Budget
Friday – International Trade, Import and Export Prices, Consumer Sentiment
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:
All three U.S. automakers are on track to be profitable in 2011 when they report results in the coming weeks. That's something that hasn't happened since 2004.
Gas prices in the United States increased by more than a dime over the past three weeks, the first increase seen since mid-October, according to a survey published Sunday. The average price of a gallon of regular gasoline was $3.35 as of Friday, the Lundberg Survey found. That's an increase of 12 cents from the last survey of 2011, conducted December 16.
The U.S. added 200,000 jobs in December and the unemployment rate fell to the lowest level in nearly three years in a fresh sign the economy is picking up and businesses are more willing to hire. The increase in jobs last month was the fourth biggest gain of 2011.
The Federal Reserve has decided to share the likely path of interest rates, according to minutes of its December 13 meeting released Tuesday. Starting in January, the Fed will release the range of Federal Open Market Committee member forecasts of the appropriate level on the target federal funds rate in the fourth quarter of the current year and the next few years.
QUOTE OF THE WEEK:
“Most people are searching for happiness outside of themselves. That’s a fundamental mistake. Happiness is something you are, and it comes from the way you think. Dr. Wayne Dyer
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