Weekly Market Update
Week of February 7, 2011
THE MARKETS:
In spite of ongoing turmoil in Egypt and the Middle East, the markets continued their gain last week. For the period ending February 4th, the Dow rose 2.3%, the S&P 500 gained 2.7%, and the Nasdaq climbed 3.1%[1] reflecting elevated optimism in the markets. The AAII Sentiment Survey for last week shows that 51.5% of investors are feeling bullish, up 9.5% from the week of January 24th. That’s well above the historical average of 39%.[2]
Indeed, this optimism is even more remarkable in light of last week’s jobs report which has been subject to conflicting opinions and interpretations. Case in point: According to a MarketWatch headline from Friday, the “job crisis isn’t over”,[3] while a cnnmoney.com headline from the same day touted that, “the job market is getting better.”[4] Each headline could be considered accurate, but clearly they offer different slants. Though the rate of hiring did not show a notable increase, the unemployment rate still fell to 9.0%[5] – bad news and good news at the same time. Some analysts predict that bad weather across the U.S. is partially to blame, with more than 850,000 workers prevented from working at the time the survey was conducted.[6] Other explanations have also been cited, and as a result, it appears that many are waiting for February’s report for clarification before jumping to conclusions.
Recent events, both within the U.S. and internationally, illustrate a noteworthy aspect of investing: It is impossible to predict how the stock market will react to news. Such an optimistic week in light of Egyptian strife and a conflicting jobs report is a pleasant surprise. It seems that the market has had time to price in geopolitical risks in Egypt and sluggish jobs growth and found such factors to be no immediate threat.[7] Clearly, the headlines and the stock market do not always move in tandem. This is a good fact to remember when evaluating how much credence should be given to sensational news reports.
ECONOMIC CALENDAR
Tuesday – Redbook
Wednesday – Bank Reserve Settlement, EIA Petroleum Status
Thursday – BOE Announcement, Jobless Claims, Wholesale Trades, Treasury Budget Friday – International Trade, Consumer Sentiment
| Data as of 02/04/2011 | 1-Week | YTD | 1-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 | 2.71 | 4.23 | 23.3 | 0.74 | -0.29 |
| Dow | 2.27 | 4.45 | 20.9 | 2.41 | 1.13 |
| NASDAQ | 3.07 | 4.39 | 30.3 | 4.48 | 0.41 |
| MSCI EAFE | 3.16 | 3.93 | 15.7 | -0.41 | 1.56 |
| 10-year Treasury Note (Yield Only) | 3.33 | N/A | 3.61 | 4.53 | 5.14 |
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. NA means not available.
HEADLINES:
The Green Bay Packers won its fourth Superbowl title in a 31-25 victory over the Pittsburgh Steelers. The Vince Lombardi Trophy is headed back to Titletown for the first time in 14 years.[8]
Super Bowl-related consumer spending will reach $10.1 billion this year, the National Retail Federation says. The Washington-based trade group cites a survey conducted by its Retail Advertising and Marketing Association division that says the average consumer will spend $59.33 on game-related merchandise, apparel and snacks, up from $52.63 last year.[9]
Hackers have repeatedly penetrated the computers running Nasdaq during the past year. Though the exchange’s trading platform was not violated and no information has been compromised, a federal investigation is underway.[10]
Businesses’ unemployment-insurance payments rose 37% in 2010. Last year, the amount employers paid into state unemployment-insurance funds rose 34%. Combined with the increase in total wages, businesses paid out $43 billion.[11]
On Friday, Bank of America appointed a new foreclosure and loan modifications czar, and created a new unit to oversee problem home loans. The new unit creates a seventh major division at the bank and will be overseen by Terry Laughlin. The move splits the largest U.S. bank by assets’ mortgage business: one focused on new and current mortgages, and another dedicated to foreclosures.[12]
QUOTE OF THE WEEK:
“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” –Winston Churchill
RECIPE OF THE WEEK:
Roasted Pepper and Artichoke Pizza
From: Diabetic Living
Artichoke hearts and goat cheese make this chicken pizza good for entertaining. It’s meant to be a main dish but it could also be a party appetizer.
Servings: 8 servings
Prep: 15 mins
Total: 35 mins
Ingredients:
1 6- to 6-1/2-ounce package pizza crust mix
1 teaspoon dried oregano or basil, crushed
1/2 cup pizza sauce
1 cup coarsely chopped or shredded cooked chicken (about 5 ounces)
1 6-ounce jar marinated artichoke hearts, drained and coarsely chopped
1 cup roasted red and/or yellow sweet peppers, cut into strips
1/4 cup sliced green onions or chopped red onion
1/2 cup shredded part-skim mozzarella cheese (2 ounces)
4 ounces semisoft goat cheese (chevre), crumbled
Directions:
1. Preheat oven to 425 degrees F. Grease a large baking sheet; set aside. Prepare pizza crust according to package directions, except stir oregano into dry mix. With floured hands, pat dough into a 15×10-inch rectangle on prepared baking sheet, building up edges slightly (crust will be thin). Bake for 7 minutes.
2. Spread pizza sauce evenly over crust. Top with chicken, artichokes, roasted peppers, and green onion. Top with mozzarella cheese and goat cheese.
3. Bake for 13 to 15 minutes more or until edges of crust are golden brown. Makes 8 servings.
GOLF TIP OF THE WEEK:
WRIST ACTION
Be careful not to flex the wrists when chipping and putting. Golfers usually do not even realize they are flexing their wrists during these shots. When this happens, controlling distance becomes almost impossible, loft will be incorrect at impact, and putts lose true roll and consistent distance control.
Always keep your wrist solid and avoid flexing them for putts or chip shots. This is imperative to achieve consistency.
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Insert your broker/dealer disclosures here. i.e. Securities offered through “Your B/D Name Here,” Member FINRA/SIPC.
*Stock investing involves market risk including loss of principal. The fast price swings of commodities will result in significant volatility in an investor’s holdings. Government bonds and Treasury Bills are guaranteed by the US Government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.
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.
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.
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.
