Posted by: thepinetree on 09/02/2010 11:49 PM
Updated by: thepinetree on 09/03/2010 12:09 AM
Expires: 01/01/2015 12:00 AM
:
Weekly Market Update Week of August 30, 2010. ~By Donna Stevenson, Pacific West Financial
Copperopolis, CA...THE MARKETS: What is traditionally Wall Street’s quietest month has been about as peaceful as a crowded five-o-clock flight to Las Vegas that’s serving up all-you-can-drink Red Bull. After closing below 10,000 on Thursday, the Dow dropped as low as 9,936 in early Friday trading before finally rallying 165 points (1.7%) to recapture the psychologically important 10,000 level and finally close at 10,150. The S&P 500 and the Nasdaq likewise rose 1.7% for the day. In spite of Friday’s performance, each of the major indexes finished to the downside for the week – proof that the ongoing tug-of-war between strong corporate balance sheets and troubling economic indicators is still exerting an influence on the markets...
Visit Pacific West Financial Group in Copperopolis Today
Although the media has a tendency to confuse the two, it is important to remember that the stock market and the economy are separate animals. Just because the economy is performing poorly doesn’t mean the stock market will, and vice versa. That being said, what we are currently seeing is a strong tendency among investors and analysts alike to make investment decisions based largely upon how the economic indicators are reading. In part, this is due to the fact that many people are still licking their wounds from the so called Great Recession of 2007-2009. Investors are nervous, skittish, uncertain, and in some cases even paranoid. What all this negativity creates is a reactionary market environment – one that moves in response to every new shred of economic news.
Case in point: Fed Chairman Ben Bernanke’s speech on the economic outlook held Friday in Jackson Hole, Wyoming. Mr. Bernanke’s remarks – the strongest yet that the Fed is ready to do what is necessary to bolster growth – sent stocks instantly higher. Although Bernanke acknowledged that the recovery is “less vigorous than we expected”, he also reiterated that growth is likely to pick up in 2011. After outlining four potential options the Fed could deploy to boost the economy, he added, “The issue at this stage is not whether we have the tools to help support economic activity and guard against disinflation. We do. The issue is instead whether, at any given juncture, the benefits of each tool, in terms of additional stimulus, outweigh the associated costs or risks of using each tool.”
The Fed's strategy carries no guarantees. Even keeping short-term interest rates near zero has done little to rejuvenate the economy. The benefits of recent stimulus programs are evaporating, and Congress has failed to agree on any new major economic aid. Put simply, there are no easy options for fixing the economy. In his closing remarks Bernanke stated, "We have come a long way, but there is still some way to travel.” Yes Mr. Bernanke, you are right about that.
Key things to watch this week:
Monday – Personal Income and Outlays
Tuesday – Chicago PMI, Consumer Confidence
Wednesday – Motor Vehicle Sales, ISM Manufacturing Index, Construction Spending
Thursday – Jobless Claims, Productivity and Costs, Factory Orders
Friday – Employment Situation, ISM Non-Manufacturing Index
HEADLINES:
The U.S. economy sputtered in the second quarter, according to new estimates from the government released Friday, although the slowdown wasn't as bad as many had feared. The nation's gross domestic product, the broadest measure of economic activity, was revised sharply lower to an annual growth rate of 1.6% in the three months ending in June. The initial reading had been for a 2.4% growth rate in the period.
Japan Prime Minister Naoto Kan says he is ready to take “bold” action as the yen approaches its all-time high against the dollar. Many traders say new records are inevitable even after this year’s 9.2% gain.
The number of babies born in the United States dropped 2.6% last year, according to a recent study. The news is not surprising, said Andrew Cherlin, a sociology professor at Johns Hopkins University, given the state of the American economy right now.
The Obama administration plans to take two new steps in the next few weeks to help troubled homeowners. The administration will begin a Federal Housing Authority refinancing effort to help borrowers who are struggling to pay their home mortgages, and will start an emergency homeowners’ loan program for unemployed borrowers so they can stay in their homes, said Housing and Urban Development Secretary Shaun Donovan on CNN’s “State of the Union.”
Toyota will recall 1.13 million Corolla and Matrix cars for a flaw that U.S. regulators said may cause stalling "at any speed without warning." The recall affects vehicles from the 2005-2008 model years in the United States and Canada and follows at least three reported accidents linked to the defect.
QUOTE OF THE WEEK:
"It is possible to give without loving, but it is impossible to love without giving." – John Wesley
RECIPE OF THE WEEK:
Toffee-Butterscotch Bars
So good, and easy too!
Ingredients:
1 package 2-layer-size yellow cake mix
1/2 cup packed brown sugar
1/2 cup butter, melted
2 eggs
1 cup cashews, chopped
1 8-ounce package toffee pieces
Butterscotch sauce
Directions:
1. Preheat oven to 350 degrees F. Grease a 15x10x1-inch baking pan; set aside.
2. In a large bowl, combine cake mix, brown sugar, melted butter, and eggs. Beat with an electric mixer on medium speed for 1 minute or until combined, scraping bowl occasionally. Stir in the cashews.
3. Pat dough into prepared pan. Sprinkle with toffee pieces. Bake in the preheated oven for 15 to 20 minutes or until a toothpick inserted in center comes out clean. Cool completely in pan on a wire rack. Cut into bars and drizzle with butterscotch sauce.
Makes 32 bars.
GOLF TIP OF THE WEEK:
Short Game Swing
A popular misconception is that the short game requires a short swing. As a result, chips, pitches, and sand shots are hit with short, stabby strokes that produce skulls, fat shots, and general misdirection.
You should think long, slow, and smooth for the short game. Precision is important around the green, so there isn't much margin for error. It's vital that you maintain a steady, smooth rhythm and tempo for every short shot you hit. Forcing yourself to make a short swing because you have to move the ball a short distance throws off your timing.
Instead, try counting through each short shot you hit: "one, two, three." Count “one” as you start the club away from the ball, "two" when you reach the top of the swing, and "three" as you swing through. From 40-yard pitch shots to delicate chips off the apron, maintain this same count. If you do, you'll find it much easier to make consistent contact.
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!
Securities offered through Pacific West Securities, Inc.,Member FINRA/SIPC.
Sources:
Marketwatch
The Wall Street Journal Online
Barrons
CNN Money
http://money.cnn.com/2010/08/27/news/economy/gdp/index.htm
http://www.bloomberg.com/news/2010-08-29/yen-rising-proves-catch-up-for-asia-exports-at-traders-target-75-to-dollar.html
http://www.cnn.com/2010/US/08/28/birth.rate.decline/?hpt=T2
http://www.bloomberg.com/news/2010-08-29/obama-administration-plans-two-mortgage-aid-steps-hud-chief-donovan-says.html
http://www.washingtonpost.com/wp-dyn/content/article/2010/08/26/AR2010082607095.html
Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq. The DJIA was invented by Charles Dow back in 1896.
The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indexes from Europe, Australia and Southeast Asia.
The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
Google Finance is the source for any reference to the performance of an index between two specific periods.
Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
Past performance does not guarantee future results.
You cannot invest directly in an index.
Consult your financial professional before making any investment decision.
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.
|
