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

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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.

March came in like a lamb, and is leaving like a Bull by Ken Mahoney

The bulls charged again last week, marking the 4th week of gains in a row for U.S. stock markets, and the longest streak of weekly wins since August. The winning run came even as daily gains largely dissolved on Thursday and Friday amidst continued jitters about a bailout plan for Greece and rising U.S Treasury yields which have highlighted concerns that the federal government is digging itself into a deep deficit hole.

In early trading on Thursday, the Dow flirted with 11,000 when it hit 10,995 – a new high for the bull market that began in March 2009 – but quickly retreated in a dramatic reversal when the day only closed with a 5 point gain. According to the standard definition, this is known as a “key reversal day” which generally has bearish implications for the stock market. At the same time though, signs of an impending bear market are negligible. Said Richard Bernstein, head of Richard Bernstein Capital Management, "To have a bear market, there are certain things you'd see: profitability start to slow, fiscal restraint. That's not really happening.

Profitability is ramping up and monetary policy is accommodative." Investors in general also feel optimistic about the future of the U.S. markets. Ned Davis Research reported on Wednesday that their so-called "Crowd Sentiment Poll," which is a composite of a number of separate sentiment indicators, has just risen into the "Extreme Optimism" zone. It’s good to see that some of the market’s skeptics are finally putting a portion of their sidelined cash reserves back to work.

In spite of mixed news, the markets have experienced wonderful momentum lately. With only 3 trading days remaining, it looks as if the first quarter of 2010 will be fondly remembered by the history books.

Key things we’ll be watching this week:

Tuesday – S&P/Case-Shiller Home Price Index, Consumer Confidence Wednesday – Factory Orders Thursday – Initial Jobless Claims, ISM Manufacturing Index, Construction Spending Friday – Stock Market Closed for Good Friday

HIGHLIGHTS: With projections of millions of foreclosures over the next five years, the Obama administration announced Friday it would make major adjustments to its $75 billion mortgage-modification program, aimed at assisting a greater number of unemployed and other troubled homeowners in modifying or refinancing their mortgages.

Regarding health reform: If your earned or investment income exceeds $200,000: In about two years, the Medicare payroll tax will rise nearly 1 percentage point to 2.35% on wages of individuals with earnings greater than $200,000 and married couples earning more than $250,000. A new 3.8% Medicare tax will be levied on investment income including interest, dividends and capital gains that exceed those thresholds.

Regarding health reform: If you itemize deductions for income tax: Starting in 2013, medical expenses have to reach 10% of your adjusted gross income to qualify for a tax deduction, as opposed to today's 7.5% standard. But seniors age 65 and older would be able to claim an itemized deduction at 7.5% of income through 2016. Congress passed a bill Thursday to make Washington the one-stop shop for cheap student loans and to boost need-based scholarships. Starting July 1, nearly all federally backed student loans, like Stafford loans, will come directly from the federal government.

Sources: Marketwatch The Wall Street Journal Online http://www.marketwatch.com/story/what-health-reform-means-for-you-2010-03-22 http://www.marketwatch.com/story/white-house-to-expand-mortgage-relief-program-2010-03-26 http://money.cnn.com/2010/03/25/news/economy/student_loans_senate/index.htm 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.

March Madness Continues for US Markets

After an 8 day winning streak, the markets finally slipped back on Friday, but still ended the week in positive territory. The Dow was up 1.1% for the week, the S&P 0.86%, and the Nasdaq 0.29%. The last time the markets had a 9 day winning streak was 1996.

The Dow’s gains represent its longest positive run since late August 2009, and many stocks are hitting fresh 52-week highs. On Wednesday alone, some 1,231 of them did so. In a positive sign of investor optimism, the Chicago Board Options Exchange Volatility Index (commonly regarded as a gauge of fear) fell below 17 last week – for the first time since May 2008. We also saw the dollar slide against higher-yielding currencies, giving further evidence that investors are leaving safe-haven investments in favor of riskier assets.

The Dow is up over 62% since its March 9th, 2009 bottom, 3% for the year, and 4% for March. “It’s been subtle – almost silent – and yet here we are at new highs,“ said Mark Luschini, Chief Investment Strategist for Janney Montgomery Scott. “It certainly doesn’t feel like the market’s climbing by leaps and bounds, but very subtly, we’ve gained 10 points here, 30 points there.”

Despite its recent winning streak, the Dow is still nearly 700 points from its close before the Lehman meltdown, leaving us a lot of ground to make up. In imitation of the famous tortoise from Aesop’s fable, let’s hope the markets keep up their slow-and-steady advancement.

Key things we’ll be watching this week:
Tuesday – Existing Home Sales, Redbook
Wednesday – Durable Goods Orders, New Home Sales
Thursday – Initial Jobless Claims, Fed Balance Sheet
Friday – GDP, Corporate Profits, Consumer Sentiment

.
HIGHLIGHTS:
A transformative health care bill is headed to President Barack Obama for his signature as Congress takes the final steps in Democrats' improbable and history-making push for near-universal medical coverage. Obama cast the debate as a war over whether the U.S. health-care system works better for the insurance companies or for consumers, and said that the bill is a "patient's bill of rights on steroids."

The Federal Reserve kept its benchmark interest rate at a record low level Tuesday and made no changes to the key "extended period" policy pledge, a signal that it believes the economy still needs support to get to a sustainable path.
Four additional banks in Georgia, Alabama and Minnesota were closed by regulators Friday, bringing the national total to 37 for the year to date.

Sources:
Marketwatch
The Wall Street Journal Online
http://www.marketwatch.com/story/fed-stands-pat-on-rates-wording-2010-03-16
http://www.marketwatch.com/story/obama-to-push-health-care-bill-ahead-of-key-vote-2010-03-19
http://www.marketwatch.com/story/consumer-price-index-flat-in-february-2010-03-18
http://www.marketwatch.com/story/four-more-bank-failures-bring-2010-tally-to-37-2010-03-19
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.

Are the markets preparing for March Madness?
By Ken Mahoney
www.thesmartinvestors.com

It’s the time of the year when we get our ‘brackets’ and figure out who will win the NCAA tournament. It is an exciting month for college basketball.
The markets have been very tame lately with low volatility. Perhaps the markets volatility will pick up and join the madness?

U.S stock indexes managed a second week of gains on Friday after wrapping up a trading session that was nearly stuck in neutral from mixed reports that showed retail sales rising, but consumer sentiment declining. The abundance of conflicting data, and the market’s reaction to it, is a reminder of what a news-sensitive environment we’re in right now. With nothing significant enough to move the indices decisively in either direction, the equities market is still trying to find its way.
Even as key indices advanced last week, commodities pulled lower. Gold futures fell 2.4% to just over $1,100 an ounce, and crude oil prices dropped to just above $81 a barrel, posting a slight loss for the week. The dollar also lost some steam on Friday, while Treasurys were mixed.

Amidst so much uncertainty, we are wise to take a longer view of the economy, ignoring the minute-to-minute volatility that can take you from depression to euphoria before breakfast. The vast majority of economists are calling for a long, slow recovery – but a recovery nonetheless. “The tailwinds behind the economy are getting stronger than the headwinds holding it back”, said Maury Harris, chief economist for UBS Securities.

Factors such as low inflation, growing exports, and solid corporate profits, combined with weakening resistance from tight credit and willingness to borrow, bode well for the long-term future of the economy.

Key things we’ll be watching this week:
Monday – Industrial Production, Housing Market Index
Tuesday – Housing Starts, Redbook
Thursday – Initial Jobless Claims, Consumer Sentiment, Leading Indicators

Data as of 03/12/2010 1-Week Y-T-D 1-Year 5-Year 10-Year
Standard & Poor's 500 0.99 3.13 52.0 0.83 -1.75
Dow 0.55 1.89 47.0 -0.27 0.70
NASDAQ 1.78 4.34 65.4 3.19 -5.31
MSCI EAFE 1.01 -0.41 64.2 0.12 -1.01
10-year Treasury Note (Yield Only) 3.71 N/A 2.95 4.49 6.17

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:
AIG said to cut bonuses to ex-workers by $21 million to meet Feinberg goal. American International Group Inc., the bailed-out insurer, cut retention bonuses to be delivered to former employees today by about $21 million to meet a target imposed by U.S. paymaster Kenneth Feinberg, said a person briefed on the company’s plans.
Industrial production in U.S. unexpectedly rose 0.1% in February. Fed says industrial production unexpectedly rose in February as growing demand for computers and communications gear overcame a drop in autos, pointing to a pickup in U.S. business spending.

A typical 65-year-old married couple without chronic conditions will need $197,000 to pay for out-of-pocket medical costs throughout retirement, according to new calculations by the Center for Retirement Research at Boston College. That figure includes insurance premiums, services not covered by Medicare, and home healthcare expenses, but it excludes nursing-home care. Retirees also have a 5% chance that healthcare costs not covered by insurance will exceed $311,000, according to the study, which was underwritten by Prudential.

Chileans braced for more blackouts after an outage yesterday left 80% of the population in part of the country without electricity, the result of grid damage from last month’s earthquake.