Now What: A Guide to Retirement During Volatile Times

How will the job market affect stocks?

by ken | 08:47 in |


How will the job market affect stocks?

The major indices closed mixed last Friday as a week of slow trading was capped by a market-wide selloff on Friday. The retreat was driven by a mediocre June jobs report and fears about a jobless recovery. The S&P closed down only 0.55%, the Dow gained 1.35%, and the Nasdaq rose 0.08%.[1]

The U.S. suffered its third month of sub-100,000 jobs growth in June, adding just 80,000 new jobs. The economy needs an average growth of at least 125,000 new jobs per month in order to be considered healthy.[2] However, let’s take a moment to dig a little deeper and consider what lies behind the jobs numbers each month. One of the complications of calculating jobs growth is seasonality, which economists have to estimate based on their knowledge of annual trends. Currently, we’re in one of the slow periods of the year, when factories slow production and retailers see fewer sales. Economists only expected to see 90,000 new jobs; although we missed that number, the situation is not as grim as it appears.

A more positive indicator that we saw in the jobs report is that the number of temporary workers grew by 25,000, accounting for nearly one-third of the new jobs last month. [3] This is good news because the hiring of temporary workers historically presages that of permanent employees. Hiring full-time employees is a significant investment that businesses may be reluctant to take on in a shaky economy. Temporary employees can fill the gap without a significant investment. As employers become more confident of their own needs and the economy, they often convert temporary employees into permanent staff.[4]

Two more positive indicators could mean that the jobs market is emerging from a spring slump. The number of Americans applying for jobless benefits fell to a three-month low in June, and the number of layoffs announced in June fell to a 13-month low – about 40% less than May’s number of layoffs. Both of these reports indicate that employers are becoming motivated to keep existing employees and reduce layoffs. That plus the increase in temp worker hiring could mean there’s hope for a rosier employment picture later this year.[5]

While the job market and economy are far from healthy and we are unlikely to see the robust employment numbers of earlier this year, we can hope to see moderate employment growth ahead. Falling gasoline prices may increase consumer spending and businesses will see their prospects improve, improving the overall employment outlook. Keep in mind while reading the media’s spin on economic reports that they often tell a small part of the picture. Headlines tend to focus on the worst-case scenario without taking the time to explain the data that can be understood by digging deeper. 

ECONOMIC CALENDAR:
Wednesday: International Trade, EIA Petroleum Status Report, FOMC Minutes
Thursday: Jobless Claims, Import and Export Prices, Treasury Budget
Friday: Producer Price Index, Consumer Sentiment


Data as of 7/6/2012
1-Week
Since 1/1/2012
1-Year
5-Year
10-Year
Standard & Poor's 500
-0.55%
7.72%
1.15%
-2.30%
3.70%
DOW
1.35%
4.54%
1.16%
-6.17%
36.17%
NASDAQ
0.08%
12.75%
3.65%
2.03%
10.28%
MSCI EAFE
-1.04%
2.15%
-14.76%
-6.07%
 2.38%
10-year Treasury Note (Yield Only)
1.66%
N/A
3.10%
5.20%
4.86%

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:
Greek aid halted until austerity back on track. According to an EU finance official, Greece will not receive its next aid disbursement until it continues the implementation of economic reforms demanded by European creditors. Auditors will assess the current state of its accounts after two difficult elections.[6]
Congress passes student loan extension. The House and Senate passed a transportation bill that included an extension of the low interest rates on government-subsidized student loans. The measure passed just days before rates were scheduled to double.[7]
China cuts lending rates again in surprise move. The interest rates cut, the second in less than a month, signals that the world’s second-largest economy could be in trouble and that Communist Party leaders are getting serious about boosting the economy. By lowering borrowing costs for homebuyers and business owners, finance officials hope to increase private sector activity.[8]
Obamacare opponents focus on state exchanges. Critics of the new healthcare act are focusing their efforts on challenging federal subsidies and tax credits in states which fail to set up insurance exchanges and require federal intervention. At issue is the language of the act, which specifies that subsidies are only available for insurance purchased in state exchanges, but makes no mention of federally-run exchanges.[9]

QUOTE OF THE WEEK:
“The two most unnecessary emotions in life are guilt and worry.” – Dr. Wayne Dyer


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.
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.
Diversification does not guarantee profit nor is it guaranteed to protect assets

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.
The Housing Market Index (HMI) is a weighted average of separate diffusion indices based on a monthly survey of NAHB members designed to take the pulse of the single-family housing market. Each resulting index is then seasonally adjusted and weighted to produce the HMI.
The Pending Home Sales Index, a leading indicator of housing activity,  measures housing contract activity, and is based on signed real estate contracts for existing single-family homes, condos and co-ops.  The PHSI looks at the monthly relationship between existing-home sale contracts and transaction closings over the last four years. The results are weighted to produce the index.
The BLS Consumer Price Indexes (CPI) produces monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services. Survey responses are seasonally adjusted and weighted to produce a composite index.
The Conference Board Leading Economic Index (LEI) is a composite economic index formed by averages of several individual leading economic indicators, which are weighted to produce the complete index.
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.
.

By clicking on these links, you will leave our server as they are located on another server. We have not independently verified the information available through this link. The link is provided to you as a matter of interest. Please click on the links below to leave and proceed to the selected site.



‘Obamacare’ & 2Q Recap

by ken | 08:09 in |


‘Obamacare’ & 2Q Recap

While the first quarter of 2012 beat expectations, the second quarter poured cold water on investors’ hopes for a strong encore. Much like the last two years, the economy got off to a solid start only to falter in the spring. Despite a strong showing in the latter half of June, markets are down for the quarter, erasing some of the gains we saw in Q1. However, the major indices are still up significantly for the year. Since January 1, 2012, the S&P has gained 8.31%, while the Dow is up 5.42%, and the Nasdaq grew by 12.66%.[i]

What are some of the factors that contributed to the Q2 doldrums? Most can be grouped into two major categories:

1.      Global economic turmoil
Concerns about the European debt crisis continued to dominate headlines this quarter, as lawmakers struggled to contain a rapidly growing crisis that threatens the integrity of the entire Eurozone. Greece skirted the edges of a disorderly default on its debt as popular opinion rose against punishing austerity measures. Although voters elected a pro-bailout coalition government, it is still unknown whether Greece will remain in the Eurozone. The Spanish were able to secure bailout funds to recapitalize their struggling banks from a centralized bailout fund as the Eurozone gambles on a more centralized union to save itself.[ii]

China, the world’s second-largest economy is decelerating; its central bank is desperately trying to cushion the landing as China’s manufacturing and export sectors – major drivers of the Chinese (and global) economy – slow.[iii]

2.      Concerns about domestic growth
Investors and analysts are worried about troubling economic reports this quarter that suggest the U.S. economy might be slowing. Stubborn unemployment, slow economic growth, and a stagnant job market continue to undermine confidence. One bright spot is that falling oil and gas prices offer consumer pocketbooks a break, and may encourage Americans to boost spending, the primary driver of economic expansion.

Taking into consideration the upcoming presidential election and expiration of the so-called Bush Tax Cuts in January, it’s no wonder many analysts expect a period of sustained volatility in the months ahead.[iv] With this in mind, we encourage you to stick to an investment strategy that is suitable for your own risk tolerance and personal investment objectives. Every individual has unique needs, and we always strive to match our clients to appropriate solutions to fill those needs. If you have any questions or concerns, please don’t hesitate to contact us.

ECONOMIC CALENDAR:
Monday: ISM Mfg Index, Construction Spending
Tuesday: Motor Vehicle Sales, Factory Orders
Wednesday: Markets closed for Independence Day holiday
Thursday: ADP Employment Report, Jobless Claims, ISM Non-Mfg Index, EIA Petroleum Status Report
Friday: Employment Situation

Data as of 6/29/2012
1-Week
Since 1/1/2012
1-Year
5-Year
10-Year
Standard & Poor's 500
2.03%
8.31%
4.19%
-1.88%
3.76%
DOW
1.89%
5.42%
5.05%
-0.79%
3.93%
NASDAQ
1.47%
12.66%
7.10%
2.55%
10.06%
MSCI EAFE
3.14%
3.22%
-12.72%
-5.61%
 2.40%
10-year Treasury Note (Yield Only)
1.67%
N/A
3.11%
5.03%
4.82%

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.

Brief: ‘Obamacare’ Supreme Court Decision

Big news last week was the Supreme Court’s historic move to uphold the president’s Affordable Care Act that will impact the way Americans receive and pay for medical care. What does this move mean for the general public, and for investors?

Broadly, the ACA stipulates that millions of people not currently covered by health care will have insurance by 2016. The Supreme Court upheld the individual mandate, meaning that by 2014, uninsured Americans must purchase insurance, or face a fine. Additionally, prior to the ACA, insurers could cherry-pick their insured, excluding those with pre-existing conditions; the new law prohibits insurance companies from excluding pre-existing conditions, and allows people to purchase insurance from state insurance exchanges.[v]
Winners: (Note: We are not recommending any investments here, just sharing some information.)
·        Hospitals: Hospital stocks jumped sharply after the Supreme Court ruling. Hospitals gain by having to provide less free care for the uninsured; currently, 25% of the care provided by hospitals goes unpaid, an amount that will decrease substantially under the new law. Hospitals also stand to gain additional business from the estimated 33 million people that will be added to the rolls of the insured.

·        Insurers: Although many insurance stocks dipped after the ruling, it’s possible they were overbid on expectations that the Supreme Court would throw out the individual mandate or the entire ACA. Insurers stand to gain under the individual mandate provision by not having to pick up the tab for the uninsured. Additionally, by getting millions young of people into the risk pool, insurers will be able to offset the expense of insuring older Americans.[vi]
Losers:
·        Medical Device Makers: Among the losers are medical device makers, who will be responsible for an excise tax of 2.3% on the sale of medical devices, expected to add $29 billion to federal coffers over the next 10 years.[vii]  

·        Large Employers: Other losers could be employers (with more than 50 employees) who do not provide insurance to employees; they stand to pay a fee of $2,000 per full-time employee.[viii]

·        Wealthy Taxpayers: Medicare payroll taxes will increase for some high-income earners, and a new Medicare surtax will be levied on investment income. Investors who think they may fall into these categories should feel free to speak with us about strategies to help mitigate these taxes.

Will the Fed’s action help out the economy and the markets?

by ken | 08:30 in |


Will the Fed’s action help out the economy and the markets?

Markets had a lackluster week as investors shrugged off two pieces of relatively positive news: that Greeks voted a pro-bailout party into office, and that the Fed took additional action to stimulate the economy. Despite a couple of strong trading sessions, markets lost ground for the week; the S&P closed down 0.58%, while the Dow lost 0.99%, and the Nasdaq gained 0.68%.
On a positive note, a few reports released last week indicate the economy could pick up steam again. April housing starts were revised upwards to 744,000, and building permits climbed from 723,000 in April to 780,000 in May, beating economists’ expectations and hopefully indicating the housing sector is improving.[i] Also noteworthy, the Conference Board’s index of leading indicators, a measure of future economic activity, rose to its highest level in four years last month, signaling that the economy should keep growing at a modest pace this year.[ii]
The biggest news last week was that the Federal Reserve will take additional measures to boost the economy by swapping another $267 billion of short term bonds for long term ones, and extending “Operation Twist” through the end of the year. The idea is to lower the interest rate of the longer bonds, which in turn is supposed to lower interest rates for borrowers on mortgages, cars, and business loans. Fed Chairman Bernanke stated that additional easing would be considered if necessary, but many investors hoped for more from the Fed, particularly in light of its tepid economic forecast for 2012. The Fed now expects GDP growth to range from 1.9% to 2.4%, down from previous estimates of 2.4% to 2.9%, and expects unemployment to remain between 8.0% and 8.2%. Markets responded poorly to the news, highlighting concern that the Fed is running out of bullets and may not be able to respond effectively to further challenges.[iii]
Coming weeks could be hard on equity markets if the global economy continues to slow, though investors have shown signs of resilience lately, indicating that many negative factors might be priced in. There are a lot of mixed signals right now, and it is simply impossible to predict how the market will respond. In uncertain times like these, it is especially important to stick to a comprehensive, long-term investment strategy.
On a side note, traders will be closely watching Monday’s Supreme Court ruling on President Obama’s healthcare plan; whichever way the vote goes, we will likely see some action in the healthcare sector.[iv]

ECONOMIC CALENDAR:
Monday: New Home Sales, Dallas Fed Mfg. Survey
Tuesday: S&P Case-Shiller HPI, Consumer Confidence
Wednesday: Durable Goods Orders, Pending Home Sales Index, EIA Petroleum Status Report
Thursday: GDP, Jobless Claims
Friday: Personal Income and Outlays, Chicago PMI, Consumer Sentiment





HEADLINES:
Spanish banks need far less than originally believed. Spanish finance ministers announced Thursday that their struggling banks may only need up to 62 billion euros ($78 billion) to recapitalize, far less than the originally expected 100 billion euros. The requested amount was based on the results of two independent audits, which examined both best case and worst case scenarios before developing the bailout request.[v]
Housing market tough for many buyers. A combination of low housing stock and wary lenders is creating problems for homebuyers in many cities. First-time homebuyers who rely on financing must compete with cash offers from investors and bidding wars with other buyers, creating upward pressure on housing prices. Rising prices or a cooling economy may increase housing stock, easing the process for buyers.[vi]
Spanish bonds rally as ECB relaxes lending rules. The European Central Bank will ease its collateral rules, allowing Spain to pledge a wider range of assets, including lower quality ones, in exchange for cash loans to revive its monetary system. Yields on 10-year Spanish bonds fell as investors felt reassured about Spain’s future.[vii]
Gas prices headed still lower. Amid the economic gloom, a bright spot for consumers is that slower economic demand is resulting in lower gas prices across the country. With oil inventories at 21-year highs, and demand slacking, consumers could see prices as low as $3.00-$3.20 by autumn, pumping a much-needed extra $114 billion into American pocketbooks.[viii]

QUOTE OF THE WEEK:
"My motto was always to keep swinging. Whether I was in a slump or feeling badly or having trouble off the field, the only thing to do was keep swinging." ~ Hank Aaron

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.
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.
Diversification does not guarantee profit nor is it guaranteed to protect assets
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.
The Housing Market Index (HMI) is a weighted average of separate diffusion indices based on a monthly survey of NAHB members designed to take the pulse of the single-family housing market. Each resulting index is then seasonally adjusted and weighted to produce the HMI.
The BLS Consumer Price Indexes (CPI) produces monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services. Survey responses are seasonally adjusted and weighted to produce a composite index.
The Conference Board Leading Economic Index (LEI) is a composite economic index formed by averages of several individual leading economic indicators, which are weighted to produce the complete index.
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.
By clicking on these links, you will leave our server as they are located on another server. We have not independently verified the information available through this link. The link is provided to you as a matter of interest. Please click on the links below to leave and proceed to the selected site.




Almost half way through the year..What’s next for the markets?

by ken | 09:27 in |

Almost half way through the year..What’s next for the markets?


After the sustained selloff in previous trading sessions, the markets rallied Friday to claim a strong gain for the week. The S&P and Dow both booked a 0.8% gain, while the Nasdaq rose 1.0%.[i] With the choppy market performance and gloomy economic sentiment we’ve seen in the past weeks, we wanted to spend some time discussing recent trends and what they might mean for the future.


In short, many of the problems that plagued the markets in 2010 and 2011 - a serious European debt crisis and recession, a slowing Chinese economy, slow domestic growth, and the looming expiration of Bush-era tax cuts - are still with us in 2012. The uncertainty around these issues has dealt investor sentiment a major blow and spurred an exodus from equities into bonds and other "safe haven" investments, pushing Treasury yields to record lows similar to levels seen in the 2008 crisis. There’s a real current of fear underlying these moves that the global economy is slipping back into recession. Whether this fear is realized depends largely on how the credit crisis in Europe develops. Things may be looking up (at least temporarily) as Eurozone leaders have pledged to lend Spain up to 100 billion euros (approx. $125 billion) to recapitalize its banks, pending an audit this month. By pumping more liquidity into the economy, policymakers have bought themselves a bit more time to find a solution.[ii] We hope that markets will react positively to the news this week.


Domestically, many people are worrying about whether 2012 will be a repeat of the last two years, where an initially promising start fizzled out in the spring. Economic data has been patchy at best, and employment growth seems to have lost steam over the past few months, with not nearly enough jobs created to sustain continued growth. At this point, we can't be sure if this is just a temporary slowdown or a sign of continued economic contraction. Based on a number of factors, we currently suspect that this is a temporary, cyclical slowdown and that job growth will pick up in the latter half of the year. Supporting this belief, the Fed’s most recent Beige Book report stated that U.S. economic growth picked up over the last two months, and hiring showed signs of a "modest increase," indicating that the situation is not as grim as many originally feared.[iii]


With respect to equity markets, we know that historically, the market suffers one 10% (or greater) market correction each year. The S&P briefly touched an intraday correction of 10%, so does that mean we can expect solid growth going forward? It’s impossible to know for sure, but it’s rare to see the kind of persistent selling pressure that we’ve seen for the last month, where, for example, the Dow experienced 17 losses in 22 trading sessions. This lingering weakness has resulted in very pessimistic investor sentiment that may set markets up for a positive rebound. Additionally, we’re also under the effect of typical Presidential Election year trends, which historically have called for a peak in April and a decline on June, a script the markets have followed closely this year. If the cyclical trend continues, we can expect a new burst of energy in the second half of the year.

HEADLINES:


Wholesale businesses restocked faster in April, indicating strong sales could push economic growth higher in the second quarter. The Commerce Department report says wholesale stock grew by 0.6% in April, nearly double the March growth. Wholesale sales grew by 1.1% in April, almost triple March sales growth.[iv]



Chinese exports jumped 15.3% in May from May 2011, compared to April’s 4.9% growth. Imports also increased 12.1% compared with March’s insipid 0.3%. Although the positive numbers may ease fears that China’s economy is slowing, the Chinese government will likely take further measures to boost their economy.[v]



Fed survey found that U.S. economy grew moderately in most regions of the country this spring. The report shows growth in each of its 12 bank districts from April 3 through May 25, indicating that despite a poor jobs showing, the economy is still chugging along.[vi]



Unemployment claims dropped by 12,000, according to the latest Labor Department report. Although a one week decline does not indicate a trend, a recent Labor Department report indicates that worker productivity is low, meaning employers will have to hire again if business picks up.[vii]



QUOTE OF THE WEEK:



“The only thing we have to fear is fear itself.” - Franklin D. Roosevelt,


Special Announcement


Ken Mahoney won a Tony Award as one of the Producers of The Best Musical on June 10







.







Share the Wealth of Knowledge!



When will the markets start to stabilize?

by ken | 08:09 in |

When will the markets start to stabilize?

 Gloomy economic data disturbed markets last week and set off alarm bells that the U.S. economy may be following Europe and Asia into a slowdown. Friday’s grim jobs report showed that the economy added just 69,000 new jobs in May, far below consensus estimates, and the unemployment rate rose to 8.2% from April’s 8.1%

. Equity markets tumbled on the news, and the Dow showed its worst performance of the year, dropping 2.70%, while the S&P and Nasdaq lost 3.07% and 3.17%, respectively. The Dow Jones Industrial Average has now slipped into negative territory for the first time in 2012, exactly one month after closing at a multi-year high. Meanwhile, the S&P 500 is still up 1.6% year-to-date, and the Nasdaq Composite is up 5.5%.

 Earlier in the week, the first quarter GDP growth estimate was revised downward to 1.9%, from the 2.2% originally reported. Although analysts had initially expected GDP growth of at least 2% in 2012, that number is beginning to look overly optimistic. Revisions to reported estimates are worth paying attention to because they can serve as leading indicators of which direction the economy is going next. The jobs data is troubling and has potential to further stall the economic recovery. Rationalizations that a warm winter artificially shifted job growth earlier in the year appear increasingly thin. The job market is simply not growing enough to ignite a robust recovery. Thankfully, the economy is still resilient in some areas.

 Inflation remains reasonably low, auto sales have continued to grow, and falling energy prices are easing the strain on consumer pocketbooks, opening the door to increased consumer spending. Even so, some analysts believe that we are falling into a familiar pattern where the economy gains traction early in the year only to falter in the second quarter.

 With both perspectives in mind, it would be premature to predict which way things will move next. Interestingly, in 2011, the Dow's first close in negative territory for the year was on August 4th, but the year still ended with a 5.5% gain. While it’s hard to dredge up the fortitude to stay invested when faced with such a slate of bad news, we haven’t yet seen the effects of lowered gas prices on consumer spending, and the U.S. is still much better off than Europe.

We live in a dynamic economic system; when one asset class goes down, another comes up. We can’t predict the future, but we should always continue looking for opportunities!

 ECONOMIC CALENDAR: Monday: Factory Orders Tuesday: ISM Non-Mfg Index Wednesday: Productivity and Costs, EIA Petroleum Status Report, Beige Book Thursday: Jobless Claims, Ben Bernanke Speaks 10:00 AM ET Friday: International Trade .

 HEADLINES: Factory activity growth slows in May. The Institute for Supply’s monthly report indicated that U.S. manufacturing grew at a slower rate in May, pushed lower by weaker hiring and declining production. However, positive new orders data suggest that manufacturing will pick up in June.

 Falling gas prices provide reprieve for consumers. A lengthy plunge in oil prices has pushed gas to prices as low as $2.99 in some areas, while the national average has dropped 30 cents since April to $3.61. The drop could give consumer confidence a much-needed boost as Americans have more discretionary income to spend.

Consumer spending rises 0.3% in April. Although consumer spending edged up from March’s 0.2%, the growth was the slowest in five months, indicating that Americans may have trouble sustaining future spending. Spanish P.M. opens door to unified European fiscal authority.

 In a speech, the Spanish prime minister reiterated a commitment to sticking with austerity plans to usher Spain out of a looming crisis and indicated support for the creation of a single fiscal body to maintain the integrity of the euro.

QUOTE OF THE WEEK: “It is hard to fail, but it is worse never to have tried to succeed.” - Theodore Roosevelt 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. 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. Diversification does not guarantee profit nor is it guaranteed to protect assets 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. The Housing Market Index (HMI) is a weighted average of separate diffusion indices based on a monthly survey of NAHB members designed to take the pulse of the single-family housing market. Each resulting index is then seasonally adjusted and weighted to produce the HMI. The BLS Consumer Price Indexes (CPI) produces monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services. Survey responses are seasonally adjusted and weighted to produce a composite index. The Conference Board Leading Economic Index (LEI) is a composite economic index formed by averages of several individual leading economic indicators, which are weighted to produce the complete index. 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. By clicking on these links, you will leave our server as they are located on another server. We have not independently verified the information available through this link. The link is provided to you as a matter of interest. Please click on the links below to leave and proceed to the selected site.

Subscribe to: Posts (Atom)