April flowers have brought May showers for the Markets?
Confidence – it’s something that investors seem to be lacking at the moment. Last week began with a strong rally as news about Europe’s debt crisis was alleviated by the announcement of a $1 Trillion aid package for Greece. The euphoria didn’t last though, as investors quickly realized that the fundamental problems causing the crisis still exist. Violence and rioting fueled by the so-called “austerity measures”, combined with ongoing weakness in Spain and Portugal also fanned the flames of investor anxiety.
Recent turmoil in Europe has led to considerable weakening of the Euro against the dollar, resulting in concern that there will be a drop in demand for U.S. exports. Such a drop could hurt the recovery that U.S. based companies have been enjoying – particularly manufacturers. Commenting on this, Quincy Krosby, chief market strategist at Prudential Financial said, "Manufacturing has been doing very well. Exports have been doing very well. And if there is any fear that the global engine is going to slow, even at the margins, it creates uncertainty.” Despite positive reports from so many areas of the U.S. economy, fear has prompted investors to pull over $12.4 billion out of equity funds in the last 2 weeks alone. At least for the moment, it seems that all eyes are on Europe.
The ride may continue to be rough for a while. The Chicago Board Options Exchange's Volatility Index — commonly known as the market's fear gauge — is up 79% since April 26, when the Dow closed at its 2010 high of 11,205. This spike in the volatility index means investors are expecting more drops in the market.
On a positive note, major indexes still advanced last week, helping soothe the wounds from the previous week’s losses. In addition, it’s good to remember that occasional pullbacks are a normal function of the equity markets. After a 14-month rally that brought the Dow back over 80% from its March 2009 low, the recent decline has been relatively modest.
Key things to watch this week: Monday – Empire State Manufacturing Survey
Tuesday – Housing Starts, Producer Price Index
Wednesday – Consumer Price Index
Thursday – Jobless Claims, Leading Indicators, Philadelphia Fed Survey
HEADLINES:
An experimental attempt to stop an oil leak in the Gulf of Mexico experienced some limited success over the weekend, BP announced Sunday afternoon. Engineers successfully inserted a tube into the damaged riser pipe from which some of the oil is spewing, capturing “some amounts of oil and gas” before the tube was dislodged, the announcement said.
Retail sales rose in April, the government reported Friday, as consumers continued to show signs of returning to stores. The Commerce Department said total retail sales rose 0.4% to $366.4 billion last month, compared with March's upwardly revised 2.1% increase.
The number of first-time filers for unemployment insurance fell last week for a fourth straight week, according to a weekly government report released Thursday. There were 444,000 initial jobless claims filed in the week ended May 8, down 4,000 from an downwardly revised 448,000 the previous week, according to the Labor Department's weekly report. The number of claims is the lowest since the 442,000 reported in the week ended March 27.
Greek Prime Minister George Papandreou declared he is not ruling out taking legal action against U.S. investment banks for their role in creating the spiraling Greek debt crisis. Both the Greek government and its citizens have blamed international banks for fanning the flames of the debt crisis with comments about Greece's likely default.
Sources: The Wall Street Journal OnlineDow Jones IndexesNed Davis ResearchMarketwatchhttp://www.nytimes.com/2010/05/17/us/17spill.html http://money.cnn.com/2010/05/14/news/economy/april_retail_sales/index.htm http://money.cnn.com/2010/05/13/news/economy/initial_claims/index.htm http://news.yahoo.com/s/ap/20100516/ap_on_bi_ge/eu_greece_financial_crisis 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.
Will the Greek Tragedy have a ‘plot twist’ for the markets? by Ken Mahoney
It seems the markets have grown quite fond of breaking records lately, and this past week was certainly no exception. The Dow’s harrowing fall of over 1,000 points on Thursday was its biggest intraday point drop ever, and one of the most gut-wrenching hours in Wall Street history. Although the finger pointing is just getting started, the general gist of the problem, according to regulators, is linked to high-frequency automated trading. Nowadays, most trades (over half the Dow’s daily volume) are placed by computers and are initiated based on preset criteria. So if a stock begins to plummet, much like Proctor & Gamble did on Thursday, it triggers an avalanche of sell orders. When this happens, if there is a shortage of buyers, some computerized trading programs will offer lower and lower prices. The result can be a downward spiral that eventually sends otherwise valuable stocks plunging to just pennies in value.
Commenting on last week’s activity, The S.E.C. and the Commodity Futures Trading Commission said in a joint statement on Friday that they “are scrutinizing the extent to which disparate trading conventions and rules across various markets may have contributed to the spike in volatility”, then added, “This is inconsistent with the effective functioning of our capital markets and we will make whatever structural or other changes are needed.” Whether increased regulation will be good or bad for the markets remains to be seen, but one thing is certain: something needs to be done to prevent another fiasco like we experienced last week.
Even before Thursday’s hemorrhaging, the markets were already staggering from concerns that the European Union wasn’t doing enough to keep their most debt-laden countries from defaulting. In recent days, the turmoil pushed the Euro to new 14-month lows against the dollar, pushed the price of crude oil down 13%, and sent treasury and gold prices to 5-month highs as traders started parking their money in less risky investments. Even a series of positive economic reports, including the Labor Department’s better-than-expected jobs report announcing the addition of 290,000 new jobs – the biggest increase since March of 2006 – wasn’t enough to save the week. Finishing off the worst 5 days of May ever, the Dow fell 5.7%, the S&P dropped 6.4%, and the Nasdaq shed 8%.
On a positive note, the International Monetary Fund on Sunday approved a three-year, EUR30 billion loan to help pull Greece out of its economic quagmire. In addition, economists are calling for positive readings on the labor market, inventories, consumer sentiment, and retail sales, as well as more healthy earnings reports this week.
Key things we’ll be watching this week: Monday – Market Volatility, Ben Bernanke Speaks
Tuesday – Redbook
Wednesday – International Trade, Treasury Budget
Thursday – Jobless Claims
Friday – Retail Sales, Industrial Production, Consumer Sentiment, Business Inventories
HEADLINES:
BP officials said Saturday they've run into obstacles in deploying the containment dome lowered to the sea floor to catch leaking crude oil at a well head one mile below the surface. Chief Operating Officer Doug Suttles said hydrates, mainly crystallized methane frozen from the crushing pressure of the ocean and low temperatures, clogged up the opening at the top of the giant funnel after it landed on the sea floor one mile below the surface.
The April employment report delivered the best news on the U.S. economy in years. The April jobless rate rose to 9.9%, even as non-farm payrolls increased by a higher-than-expected 290,000.
Pakistan's Taliban militants were behind the botched May 1st Times Square bombing in New York, top administration officials said, reversing earlier U.S. claims casting doubt on such a connection. Attorney General Eric Holder told ABC News's "This Week" talk show, one of two Sunday shows on which he was scheduled to appear, that ''We've now developed evidence that shows that the Pakistani Taliban was behind the attack," according to an excerpt of the show's transcript.
The International Monetary Fund on Sunday approved a three-year, EUR30 billion loan to help pull Greece out of an economic quagmire. The unprecedented IMF loan, the largest financial commitment the institution has ever made to a single country, is part of a EUR110 billion IMF/European Union package that includes conditions requiring Athens to tighten its fiscal belt and raise taxes.
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.
Will the Markets bring May Flowers? By Ken Mahoney
U.S. Stocks fell sharply on Friday, ending the week on a sour note, but still finishing positive for April – the third straight month of gains. For the week, the S&P was down 2.5%, the Dow 1.8%, and the Nasdaq 2.7%. For April, the S&P rose 1.5%, the Dow 1.4%, and the Nasdaq 2.6%.
Last week’s slide was led by the financial sector as investors became increasingly concerned about how the SEC’s probe into Goldman could eventually affect other large banks. Naturally, this is an area where the public is especially skittish right now considering all the turmoil wrought on the world economy from the financial crisis that began in 2007. The technology sector also performed poorly, in part due to some disappointing earnings reports.
These stock declines come on the heels of a relatively strong first quarter of economic growth. The Commerce Department reported on Friday that the U.S. economy grew at a 3.2% annual rate during the first three months of the year. Although this slightly missed expectations, consumer spending accelerated, consumer confidence declined less than projected, and the core inflation rate slumped to its lowest number in over 50 years. Overall, we can be very thankful for a strong start to 2010, both for the U.S. stock markets, and for the economy.
On average, since 1990, May has been the best performing month of the year for stocks. And while we certainly don’t know what the future will hold, the general consensus is that things are still looking up. "We're living in a world of good growth, no inflation pressures and good earnings. That's a pretty good mixture for equity markets to do reasonably well.” said Jeff Applegate, CIO at Morgan Stanley Smith Barney. Many other industry veterans echo the same sentiments.
There are a number of key economic reports that could affect the markets next week, as well as the ongoing development of the Goldman probe, and Fed Chairman Bernanke’s address on Thursday. As always, we’ll be watching and keeping you informed!
Key things we’ll be watching this week:
Monday – Motor Vehicle Sales, Personal Income and Outlays, ISM Manufacturing Index, Construction Spending
Tuesday – Factory Orders, Pending Home Sales Index
Wednesday – ADP Employment Report, ISM Non-Manufacturing Index
Thursday – Ben Bernanke Speaks at 9:30 AM ET, Jobless Claims
Friday – Employment Situation, Consumer Credit
HEADLINES:
The Gulf of Mexico oil spill could cost BP $3 billion or more. Under current law, an oil well's owner is responsible to foot the bill for the entire cost of cleanup in the event of a disaster. In this case that includes BP and minority partners Anadarko and Mitsui. Cleanup costs are currently running about $6 million a day, according to BP.
Your next trip to the barber could trim a little more than usual from your pocketbook, depending on where you live. In an attempt to balance their budgets, states like Michigan and Nebraska are considering taxing luxury grooming services. And while you might not think a haircut is a luxury item, they argue that you could always do it cheaper or at home.
Greece will face additional austerity measures as part of the price for a massive, multi-year loan package from its euro-zone partners and the International Monetary Fund. News reports on Friday said the Greek government has agreed to implement an additional 23 billion to 24 billion euros ($31.8 billion) worth of cuts in return for the aid.
More Americans expect to lean more heavily on Social Security for retirement, and fewer are optimistic about the equity they've built up in their homes, a new Gallup poll shows.
Sources:
Marketwatch
The Wall Street Journal Online
Barrons
CNN Money
http://money.cnn.com/2010/04/30/news/economy/bp_gulf_oil_spill_cost/index.htm
http://money.cnn.com/galleries/2010/news/1004/gallery.wacky_state_taxes/index.html
http://www.marketwatch.com/story/more-austerity-on-way-as-greece-aid-talks-near-end-2010-04-30
http://www.theatlantic.com/business/archive/2010/05/what-the-future-of-retirement-looks-like/39763/
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 high will the Stock Market go? By Ken Mahoney
www.thesmartinvestors.com
In last week’s commentary, we discussed the fact that a strong earnings season could provide welcome support for the markets, and so far, things are certainly shaping up that way. As of Friday’s close, 172 of the S&P 500’s companies had reported earnings, 83% of which beat analyst expectations according to Thompson Reuters. Capping off the week was also a refreshing announcement from the Commerce Department showing that sales of new homes in the U.S. posted their largest year-over-year increase in nearly 5 years. The combination of strong earnings and positive housing data led the Dow to its highest close since September 19th, 2008, and its 8th straight week of gains. The Nasdaq was also up for its 8th consecutive week, closing 2% higher. The S&P which fell last week after news of the charges against Goldman Sachs Group, Inc., also climbed 2% for the week and ended at 2,530.15.
While the recent weeks of gains have been modest, the trend of steady incremental advancement is much healthier than the volatile ups and downs we experienced earlier in the year. Instead of jumping in and out of the markets based on media hype, investors seem to be more focused on earnings, buying companies that are performing.
In consideration of the powerful rally we’ve been experiencing, some analysts insist that the market is overbought and getting ahead of itself. If we are due for a pullback as some predict, it is unlikely to happen next week – the 2nd ‘peak week’ of the earnings season with 164 companies set to report. Either way, we’ll stay focused on what’s happening and adjust quickly to any shift in current market conditions.
Key things we’ll be watching this week:
Tuesday – S&P Case-Shiller Home Price Index, Consumer Confidence
Wednesday – EIA Petroleum Status, FOMC Meeting Announcement
Thursday – Jobless Claims, EIA Natural Gas Report
Friday – GDP Consensus, Consumer Sentiment
HEADLINES:
The $1billion fraud prosecution of Goldman Sachs boosts the White House’s case for US financial reform, which is hoping that fresh anti-Wall Street sentiment will push an overhaul in financial regulation through a deeply divided Senate this week. Political analysts say that the fraud case brought by the Securities and Exchange Commission (SEC) against Goldman came at a crucial time. Ethan Siegel of the Washington Exchange, which monitors Capitol Hill for institutional investors, says: "The SEC's announcement reminded the country of what it was so upset about with regard to the economic downturn - which was the egregiousness of the behavior of big financial institutions."
Sales of newly built homes shot up 27 percent in March – the largest monthly gain in nearly five decades – as mild weather and a lucrative tax credit pumped up demand for homes in all four regions of the country, according to federal data released Friday. The Commerce Department reported that new-home sales jumped to a seasonally adjusted annual rate of 411,000, reversing February's record low and far exceeding the expectations of many experts who track the industry.
As the 2008 financial crisis was developing, top Securities and Exchange Commission employees and contractors were using government computers on official time to view pornography, according to an SEC inspector general. The SEC's inspector general found that 33 employees or contractors violated commission rules and policies by viewing porn, according to a memo obtained Friday by MarketWatch.
The Federal Reserve is expected to increase interest rates in September. Morgan Stanley Chief Economist Richard Berner told Swiss twice-weekly Finanz und Wirtschaft in an interview published Saturday. "I anticipate a first hike in September. That's when inflation expectations will change," Berner said.
QUOTE OF THE WEEK:
“Be fearful when others are greedy and greedy when others are fearful.” – Warren Buffett
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!
Sources:
Marketwatch
The Wall Street Journal Online
Barrons
CNN Money
http://www.guardian.co.uk/business/2010/apr/25/goldman-sachs-financial-reform-senate
http://www.washingtonpost.com/wp-dyn/content/article/2010/04/23/AR2010042305180.html
http://www.marketwatch.com/story/inspector-sec-staff-watched-porn-during-crisis-2010-04-23
http://www.marketwatch.com/story/morgan-economist-sees-us-rate-hike-in-september-2010-04-24
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.
Goldman, Earnings, and more by Ken Mahoney
Even with Friday’s sell off, two of the three major indices – the Dow and the Nasdaq – managed to pull off their 7th consecutive week of gains. The S&P ended slightly lower for the week, but still managed to rise in seven of the last nine weeks.
The mixed week is due in large part to the eruption (no pun intended) that hit Wall Street in the form of a Securities and Exchange Commission suit against Goldman Sachs Group Inc. for failing to disclose to investors key information related to mortgage-backed securities. Friday’s selloff saw the Dow fall 125.91 points, the S&P 19.54 points, and the Nasdaq 34.43 points. The SEC's civil suit could put some strain on the financial sector for a while, as there is still uncertainty about whether regulators will pursue additional institutions. Lawmakers have pledged to boost their efforts to investigate practices and complex investments that contributed to the financial crisis.
Even as some eyes will remain focused on Goldman and the SEC this week, there may be enough good news to keep the markets chugging along. So far, less than 10% of the S&P 500 has reported results, and 123 companies are due to report this week. Earnings have been coming in strong to this point, and according to Thomson Reuters, they are on track to have risen 39% from a year ago. Revenues are on track to have risen 10% from a year ago.
With the S&P up over 80% since the bottom on March 9th, 2009, some analysts predict that stocks are due for a pullback, but earnings will play a large part in how the market performs in the weeks ahead. Let’s hope that the overall financial health of corporate America helps prevent a near-term correction.
Key things we’ll be watching this week:
Monday – Leading Indicators
Tuesday – Redbook
Wednesday – EIA Petroleum Status Report
Thursday – Producer Price Index, Jobless Claims, Existing Home Sales
Friday – Durable Goods Orders, New Home Sales
Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized. Sources: Yahoo! Finance, Google Finance, Barron’s, djindexes.com, 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:
The SEC's recent suit against Goldman is the agency's biggest assault on a Wall Street firm in a matter stemming from the credit crisis. The SEC said that in early 2007, as the U.S. housing market teetered, Goldman Sachs created and sold a CDO linked to subprime mortgages without disclosing that hedge fund Paulson & Co. helped pick the underlying securities and bet against the vehicle, known as Abacus 2007-AC1.
Greek officials said Sunday that the cloud of volcanic ash that has disrupted air travel in much of Europe could postpone a key meeting with European and International Monetary Fund officials on aid for the country. Representatives of the European Commission, the European Central Bank, and the IMF were scheduled to gather on Monday for two weeks of talks on technical details of a joint aid package. That package, if needed to avert a Greek insolvency, could provide Athens with an estimated €45 billion this year. Most northern European airports have been shut until at least Sunday night, with chances of further delays reaching into Monday or beyond.
U.S. Treasury Secretary Timothy Geithner on Sunday expressed confidence that lawmakers will bridge partisan differences on the overhaul of financial regulations and pass a bill that protects taxpayers from financing future bailouts. "I am very confident that we're going to have the votes for a strong package of financial reforms that will bring derivative markets out of the dark, help protect the taxpayers from having to fund future bailouts and trying to make sure we're getting Americans some basic protection against fraud and abuse," Geithner told NBC's "Meet the Press."
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!
Sources:
Marketwatch
The Wall Street Journal Online
Barrons
CNN Money
http://online.wsj.com/article/SB10001424052748704508904575191882961621478.html?mod=WSJ_hpp_MIDDLETopStories
http://www.businessweek.com/news/2010-04-18/u-k-germany-pile-pressure-on-goldman-sachs-after-fraud-suit.html
http://online.wsj.com/article/SB10001424052748704508904575191961384072050.html?mod=WSJ_hpp_LEFTTopStories
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 inform
The Dow over 11,000, will it hold? by Ken Mahoney
It seems the markets have been flirting with trader’s emotions lately. Early in the week, stock and bond markets were fanning the flames of new milestones, but quickly cooled on Wednesday when the Dow fell 72.47 points to 10,897.52, marking the biggest decline in more than a month. On Friday, stocks began their ascent again, briefly topping 11,000 during the final 10 minutes of trading, and eventually ending the session at 10,997.35. Commenting on this “psychologically important” number, Jeffrey Kleintop, chief market strategist at LPL Financial said, "The move to 11,000 is a clear sign of a well-advanced recovery in the market".
For the week, the S&P 500 gained 8 points, closing at an 18-month high, while the Nasdaq composite gained 17 points, ending at its highest point since June of 2008. The Dow, Nasdaq, and S&P 500 have all risen in seven of the past eight weeks.
Last week, the markets were helped by positive sales reports from the nation’s retailers, shifting focus away from concerns about ongoing weakness in the labor and housing markets. This week, with the unofficial start of the earnings season kicking off, more good news could be in store for the markets.
On a final note, don’t forget that the week ahead brings the tax-filing deadline to an end on Thursday, April 15th.
Key things we’ll be watching this week:
Monday – Treasury Budget
Tuesday – International Trade, Redbook
Wednesday – Consumer Price Index, Retail Sales, Business Inventories
Thursday – Initial Jobless Claims, Industrial Production
Friday – Housing Starts, Consumer Sentiment
Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized. Sources: Yahoo! Finance, Google Finance, Barron’s, djindexes.com, MSCI Barra. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not available.
HIGHLIGHTS:
Poland’s President Lech Kaczynski and dozens of other top officials were killed in a plane crash in Russia Saturday. Cities across Poland fell silent for two minutes Sunday afternoon as the country remembered them.
Euro-zone finance ministers agreed Sunday that if heavily indebted Greece were to get a bailout, it could receive as much as €30 billion in loans this year at about 5% interest from fellow euro nations.
Twin Cities businessman Tom Petters will likely spend the rest of his life in prison for orchestrating a $3.65 billion Ponzi scheme -- one of the largest in U.S. history second only to Bernie Madoff.
Supreme Court Justice John Paul Stevens, leader of the high court's liberal bloc and the court's oldest member, is retiring this summer, giving President Barack Obama his second Supreme Court opening to fill.
The U.S. and Russia sealed the first major nuclear weapons treaty in nearly two decades Friday, agreeing to slash the former Cold War rivals' warhead arsenals by nearly one-third and talking hopefully of eventually ridding a fearful world of nuclear arms altogether.
QUOTE OF THE WEEK:
To be able to give away riches is mandatory if you wish to possess them. This is the only way that you will be truly rich.” - Muhammad Ali
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!
Sources:
Marketwatch
The Wall Street Journal Online
Barrons
CNN Money
http://online.wsj.com/article/SB10001424052702304168004575177872689747694.html?mod=WSJ_hpp_MIDDLETopStories
http://online.wsj.com/article/SB10001424052702304168004575177203537027616.html?mod=WSJ_hpp_LEFTTopStories
http://money.cnn.com/2010/04/08/news/economy/Tom_Petters/index.htm
http://www.marketwatch.com/story/supreme-court-justice-stevens-to-retire-2010-04-09
http://www.msnbc.msn.com/id/36050902/ns/world_news-europe/
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.
Will the market continue to climb? By Ken Mahoney
With the Dow up 4.1% for the 1st quarter, the S&P up 4.9%, and the Russell 2000 index of small company stocks up 8.5%, 2010 is off to the races! Both the Dow and the S&P posted their 4th consecutive quarter of gains, and their best 1st quarter performance in over 10 years.
Investor’s ride to recent gains has certainly not been without bumps. Amidst credit problems in Greece and an ongoing healthcare debate in the U.S., the quarter’s rally-fade-rally roller coaster saw the Dow shed more than 7% off its mid January high, leaving it down 5% for the year. Thankfully, it didn’t take investors long to come to the conclusion that with the debt crisis likely to be contained, stock valuations at reasonable levels, and corporate balance sheets strong, the footing for stocks appeared relatively stable. And so began the second rally of the quarter – one that gave birth to an eight-session winning streak, and eventually ended the quarter up 428.58 points.
The question everyone seems to be asking now is: Will this trend continue? As you well know, when it comes to the stock market, we never make predictions. That being said, there are signs pointing to a bright future for the stock market. Consider a few:
- U.S. corporate balance sheets are strong. After showing a steep decline during the financial crisis, in the 4th quarter of 2009, undistributed corporate profits hit an all-time high of $527 billion at a seasonally adjusted annual rate.
- Cash stockpiles could be put to work in mergers and acquisitions, fueling corporate growth and higher prices. The nonfinancial companies in the S&P have a record $830 billion of cash on hand.
- Optimism is growing that the U.S. economy is healing despite some weak spots such as housing and unemployment. Retired Fed Chairman Alan Greenspan said Sunday that the likelihood of a so-called double dip recession “have fallen very significantly in the last two months". He added, "There is a momentum building up which is really just beginning, and it's got a way to go”.
- Historically, 1st quarters are not the strongest of the year. Going back to 1945, on the S&P, 1st quarters have only gained an average of 1.9% while the 4th quarter has gained an average of 3.6%.
Granted, both stocks and the U.S economy still face hurdles. With the Fed moving forward with its plan to end the unprecedented easing of credit, unemployment at 10%, construction spending falling, and rising taxes on the horizon, there are certainly no guarantees that the 2nd quarter will be as good – or better – than the first.
Whatever the future brings, one thing is certain: We will not allow the market’s recent advancement to make us complacent. We are committed to staying ever alert to changing economic tides, and to making prudent adjustments to protect the assets you have entrusted to our care.
The U.S. economy created 162,000 jobs in March, the largest seasonally adjusted increase in nonfarm payrolls in three years, the Labor Department reports.
The U.S. Treasury Department on Friday confirmed $4.4 billion in payments from two companies that received funds from the Troubled Asset Relief Program. Hartford Financial Services Group, Inc. repaid $3.4 billion to repurchase preferred shares, while General Motors Co. repaid $1 billion.
The Obama administration handed down a tough new set of mileage standards for cars and light trucks Thursday, as part of its drive to cut harmful emissions and ease the nation's dependence on foreign oil. The rules, based on a joint proposal by officials at the Environmental Protection Agency and Transportation Department, aim to raise the average mileage of new cars on U.S. roads to 35.5 miles per gallon by 2016. That's a 34% increase from the current 26.4 mpg level and accelerates emissions targets set by Congress in 2008.
Former American International Group (AIG) executive Joseph Cassano will likely not face criminal charges related to the collapse of the insurance giant, CBS news reported on its website Friday evening. Cassano will meet with Justice Department lawyers next week in what is seen as the end of the criminal investigation into the collapse, which resulted in a U.S. government bailout to the tune of $180 billion.
Have you filed your taxes yet? The top five pro.
0crastinating U.S. cities last year were Houston, Chicago, New York, Austin and San Francisco, according to TurboTax.
QUOTE OF THE WEEK:
In reference to the U.S. economy: "We are beginning to turn the corner" - President Obama speaking on Friday to employees of a manufacturing plant that received government stimulus money.
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!
Sources: The Wall Street JournalStrategas Research PartnersUSA Today http://www.marketwatch.com/story/treasury-confirms-tarp-payments-from-gm-hartford-2010-04-04 http://www.marketwatch.com/story/usseen-ending-aig-probe-without-charges-report-2010-04-03 http://www.marketwatch.com/story/payrolls-rise-162000-best-gain-in-three-years-2010-04-02-83000 http://www.marketwatch.com/story/as-april-15-nears-dont-forget-these-tax-tasks-2010-04-02 http://www.marketwatch.com/story/us-sets-tougher-car-mileage-standards-2010-04-01
Russell 2000 Index - What Does Russell 2000 Index Mean? – It is an index measuring the performance of the 2,000 smallest companies in the Russell 3000 Index, which is made up of 3,000 of the biggest U.S. stocks. The Russell 2000 serves as a benchmark for small cap stocks in the United States.
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.