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Posted by: thepinetree on 11/02/2010 02:12 PM Updated by: thepinetree on 11/02/2010 08:27 PM
Expires: 01/01/2015 12:00 AM
:



Weekly Market Update Week of November 1, 2010 ~by Donna M. Stevenson of Pacific West Financial Group

THE MARKETS: October provided another example that the stock market and the economy do not always move in tandem. For the month, the Dow posted its best October since 2006, rising 3%, the S&P advanced 4%, and the Nasdaq leapt 6%1. Meanwhile, the government’s initial reading on Gross Domestic Product – the broadest measure of the economy – showed that the current recovery is still one of the weakest in generations. For three months ending in September, GDP grew at an annual rate of only 2%. During the past 30 years, the average growth rate during a U.S. economic expansion has been 3.6%. During the end of 2009, growth was as strong as 5%.



In light of these figures, the past two quarters have been understandably disappointing (2Q growth was 1.7%).2 What do these numbers mean in plain English? On the bright side, they mean the economy isn’t shrinking; or worse, freefalling, as some naysayers have predicted. They also show that we are moving in the right direction – even a 0.3% increase is worth noting. From another perspective though, the lackluster growth we are seeing is too slow to bring down the unemployment rate, and likely too slow to keep the Federal Reserve from intervening with another round of quantitative easing.

Even as voters hit the polls Tuesday, the Fed’s FOMC (Federal Open Market Committee) is set to convene its 8th meeting of the year. As investors digest election results the following day, economists expect the Fed to announce plans to stimulate the economy with another $500 billion to $1 trillion injection.3

Also anticipated this week is the government’s closely watched jobs report due Friday. Employers are expected to have added 45,000 jobs in October, and the unemployment rate is projected to hold at 9.6%.4 Since the jobs report comes out after the Fed’s plans for quantitative easing are announced, investors will surely be analyzing it for signs as to whether QEII was warranted.

Between the election, the Fed’s FOMC meeting announcement, and the jobs report, the first week of November will be a busy one.

ECONOMIC CALENDAR:5 Monday – Personal Income and Outlays, ISM Manufacturing Index, Construction Spending Tuesday – Motor Vehicle Sales Wednesday – ADP Employment Report, Factory Orders, ISM Non-Manufacturing Index, EIA Petroleum Status Report, FOMC Meeting Announcement Thursday – BOE Announcement, Jobless Claims, Productivity and Costs, ECB Announcement, EIA Natural Gas Report Friday – Pending Home Sales Index, Employment Situation, Consumer Credit


HEADLINES:
Monster Worldwide (jobs website operator) reported third-quarter results Thursday that easily topped forecasts, and the company raised its fiscal outlook. During the company's conference call, Monster CEO Sal Iannuzzi said that "while economies still aren't as strong as any of us would like to see them around the world, they are picking up." He added that "the momentum clearly in Europe, United States, North America and Asia is significantly more positive than it was a year ago." 6

For the school year 2010-11, in-state tuition and fees at public four-year colleges and universities rose to $7,605, up 7.9% from a year ago, the College Board reported Thursday. At private four-year institutions, the average cost rose 4.5% to $27,293. 7

September’s new-home sales climbed 6.6% from a month earlier to a seasonally adjusted annual rate of 307,000 the Commerce Department said Wednesday. When compared to a year earlier, the rate tumbled 21.5%. September saw the fourth-worst monthly reading since 1963, though these statistics are notoriously prone to later revisions.8

Two packages found on cargo flights from Yemen bound for the U.S. contained explosive material, President Barack Obama said Friday, after U.S. and European authorities went on high alert following the discovery of the parcels. President Obama said authorities had uncovered a “credible terrorist threat.” Both packages were addressed to Jewish organizations in Chicago. 9

QUOTE OF THE WEEK: “Farming looks mighty easy when your plow is a pencil and you're a thousand miles from the cornfield.” – Dwight D. Eisenhower

RECIPE OF THE WEEK:


Sun Dried Tomato and Green Onion Dip From: The Food Channel
This fresh and delightful dip makes any chip taste better.
Ingredients: 1/2 cup sun-dried tomatoes in oil, drained and chopped 16 ounces cream cheese, softened 1 cup sour cream 1 cup mayonnaise 2 teaspoons hot red pepper sauce 2 teaspoons kosher salt 1 1/2 teaspoons freshly ground black pepper 4 scallions, sliced thin

Directions: 1. Puree tomatoes, cream cheese, sour cream, mayonnaise, pepper sauce, salt and pepper in a food processor until fairly smooth. Add scallions, reserving 1 tablespoon sliced green part for garnish. Pulse a few more times until combined.
2. Transfer to serving bowl and garnish with reserved scallion. Serve a room temperature.

GOLF TIP OF THE WEEK:
Practice Short Putts Until You Can’t Miss
Next time you go out to practice, instead of focusing on your driving, practice two to three foot puts until you can’t miss. Then, move back one additional foot and practice four foot putts until you can’t miss. Then, move back another foot, and so on.
Most golf courses and driving ranges have putting greens that are free. Utilize these facilities to improve upon the most important stroke saving part of your game – putting. Everyone can improve in this area, and it will have the quickest impact on your score.
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. 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.
1 http://money.cnn.com/2010/10/29/markets/markets_newyork/index.htm
2 http://money.cnn.com/2010/10/29/news/economy/gdp/index.htm
3 http://www.washingtonpost.com/wp-dyn/content/article/2010/10/31/AR2010103103818_2.html?sid=ST2010103103824
4 http://money.cnn.com/2010/10/31/markets/stocks_lookahead/index.htm
5 http://www.econoday.com/
6 http://money.cnn.com/2010/10/29/news/economy/thebuzz/index.htm
7 http://money.cnn.com/2010/10/28/pf/college/college_tuition/index.htm
8 http://blogs.wsj.com/developments/2010/10/27/new-home-sales-stuck-at-rock-bottom/
9 http://www.marketwatch.com/story/suspicious-air-cargo-prompts-heightened-security-2010-10-29


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