Weekly Market Update
Week of December 06, 2010
THE MARKETS:
Does it ever seem to you that news headlines possess a split personality? That everything is always rosy or doom and gloom with no middle ground? This perception scares many people out of investing leading them to conclude that such unpredictability is a risk they can do without. Is this a recent phenomenon?
While it may be obvious that sensational headlines are designed to get an audience’s attention, media influence over public opinion is a long-held tradition. Consider a few headlines from years past:[i]
Can Capitalism Survive? – 1975
Is There Light at the End of the Tunnel? – 1992
Awash in Troubles – 1984
Do any of these headlines sound familiar, even recent? If the years weren’t printed next to them, would you conclude that two of them are over 25 years old? Often, such dire predictions leave something out. In many cases, even as the news is inundated with pessimistic headlines, positive long-term trends are in development.
Just this Sunday, Fed Chairman Ben Bernanke appeared on CBS’ 60 Minutes. Included among his comments were positive statements such as, “I have every confidence that this economy will recover, and recover in a strong and sustained way. The American people are among the most productive in the world. We have the best technologies. We have great universities. We have entrepreneurs. I just have every confidence that as we get through this crisis, that our economy will begin to grow again, and it will remain the most powerful and dynamic economy in the world.”[ii]
To our point, just an hour after the Fed Chairman’s interview, CNN lead with this headline: Bernanke on ’60 Minutes’: Grim Outlook.[iii] Granted, not everything Bernanke said was positive, but why did CNN choose to highlight the negative? Because sensational headlines sell. Remembering this fact can help you avoid making rash, emotional decisions, and may even help you sleep better at night.
| Data as of 12/03/2010 | 1-Week | Y-T-D | 1-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 | 2.97 | 9.83 | 11.4 | -0.64 | -0.69 |
| Dow | 2.62 | 9.15 | 9.80 | 0.93 | 0.97 |
| NASDAQ | 2.24 | 14.2 | 19.3 | 2.80 | -0.20 |
| MSCI EAFE | 3.68 | 2.32 | 0.30 | -0.19 | 1.01 |
| 10-year Treasury Note (Yield Only) | 2.86 | N/A | 3.38 | 4.52 | 5.51 |
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.
ECONOMIC CALENDAR: [iv]
Tuesday – Consumer Credit
Wednesday – EIA Petroleum Status Report
Thursday – Jobless Claims, EIA Natural Gas Report
Friday – International Trade, Consumer Sentiment, Treasury Budget
HEADLINES:
The U.S. Senate on Saturday defeated two attempts by Democrats to extend the Bush-era tax cuts for the middle class permanently. After the Senate voted, President Barack Obama told Democratic congressional leaders he would be open to a temporary extension of the Bush-era tax cuts for the affluent, but he would demand concessions from the GOP.[v]
The United States has reached a tentative free trade agreement with South Korea, the White House said Friday. The agreement, which must be ratified by Congress, strengthens economic ties between Washington and Seoul at a time when the longtime U.S. ally faces an increasingly hostile northern neighbor. If ratified, the agreement would eliminate tariffs on over 95% of industrial and consumer goods within five years.[vi]
A surprising increase in the number of unemployed Americans wasn’t enough to stall oil’s momentum Friday as it cruised to a 26-month high. Benchmark oil settled up $1.19 at $89.19 a barrel on the New York Mercantile Exchange. It’s the second time in less than a month that oil has reached the level where it was in the fall of 2008. There are widespread expectations that the price will hit $90 a barrel by year’s end and head toward $100 a barrel by next spring when traders begin looking ahead to the summer driving season.[vii]
Nonfarm payrolls rose by 39,000 in November, far lower than the 155,000 gain expected by economists surveyed by MarketWatch and the upwardly revised figure of 172,000 jobs gained in October.[viii]
QUOTE OF THE WEEK:
There are always flowers for those who want to see them. – Henri Matisse
RECIPE OF THE WEEK:
Chocolate Mint Divinity
From: Better Homes and Gardens
This milk chocolate divinity candy recipe is spread with additional chocolate and sprinkled with crushed peppermint candies.
Servings: 81 pieces
Ingredients:
2 7-ounce bars milk chocolate
2-1/2 cups sugar
1/2 cup light-colored corn syrup
1/2 cup water
2 egg whites
2 squares (2 ounces) unsweetened chocolate, melted and cooled
1/2 teaspoon peppermint extract
1/4 cup crushed peppermint candies
Directions:
1. Line a 9x9x2-inch baking pan with foil, extending foil over edges of pan. Butter foil; line with chocolate bars. Set pan aside.
2. In a heavy 2-quart saucepan combine sugar, corn syrup, and water. Cook over medium-high heat to boiling, stirring constantly with a wooden spoon to dissolve sugar. This should take five to seven minutes. Avoid splashing mixture on sides of pan. Carefully clip candy thermometer to pan. Cook over medium heat, without stirring, to 260 degree F, hard-ball stage. Mixture should boil at moderate, steady rate over entire surface. Reaching hard-ball stage should take about 15 minutes.
3. Remove pan from heat; remove thermometer. In a large mixer bowl, immediately beat egg whites with a sturdy, freestanding electric mixer until stiff peaks form (tips stand straight).
4. Gradually pour hot mixture in a thin stream (slightly less than 1/8inch diameter) over egg whites, beating on high speed and scraping bowl occasionally. This should take about three minutes. (Add mixture slowly to ensure proper blending.) Add unsweetened chocolate and peppermint extract. Continue beating on high speed, scraping bowl occasionally, just until candy starts to lose its gloss. When beaters are lifted, mixture should fall in a ribbon, but mound on itself and not disappear into remaining mixture. Final beating should take five to six minutes.
5. Immediately spread over chocolate bars in prepared pan. Sprinkle with crushed candies. When firm, lift out of pan; cut into 1-inch squares. Store tightly covered.
Make-Ahead Tip:
Up to three days ahead prepare divinity. Store at room temperature in a tightly covered container.
GOLF TIP OF THE WEEK:
Get Rhythm
In a golf swing, the rhythm describes the total time it takes to complete the swing among its three main parts: backswing, downswing and forwardswing. If you treat the golf swing like a simple pendulum and divide it into equal beats or counts, the backswing should take two beats, and the combined downswing and forwardswing two beats. For example, you should be able to count “one-two” to the top of your backswing, and “three-four” to impact and finish. This 2:1:1 ratio is the golf swing rhythm. Like tempo, it’s critical that you have the same rhythm for every club and every swing.
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Insert your broker/dealer disclosures here. i.e. Securities offered through “Your B/D Name Here,” 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.
