THE MARKETS:
It’s time to take a deep breath. After all the naysayer news bites and political bickering, it seems a debt deal has finally been made. Even so, the drama continued through last week as stocks and politics both took a wild ride. U.S. indexes extended their losing streak Friday as the Dow and the S&P 500 slid to their worst performance in over a year on fears lawmakers wouldn’t resolve the debt crisis issue.
As we anticipated, in what appeared to end the frustrating stalemate, President Obama announced late Sunday a deal to raise the debt ceiling and dramatically curb federal spending had been reached. “I want to announce that the leaders of both parties, in both chambers, have reached an agreement that will reduce the deficit and avoid default,” Obama said.[i]
A Republican source close to the negotiations told CNN the goal is $3 trillion in savings, and that the deal would include a $2.4 trillion increase in the debt ceiling. The pending agreement would allow the debt ceiling to be raised by enough to last at least through the end of 2012.[ii] Of course, it ain’t over till it’s over, and the proposal still has to be put in front of Congress for a vote.
While it appears a debt-ceiling disaster has been temporarily avoided, we believe it is too early to make a judgment on what the final outcome will be. Right up until the eleventh-hour, republicans and democrats were still wrangling over the details – and you know what they say resides in the details… Whatever happens, we promise to keep you informed.
ECONOMIC CALENDAR:
Monday – ISM Mfg Index, Construction Spending
Tuesday – Motor Vehicle Sales, Personal Income and Outlays
Wednesday –ADP Employment Report, Factory Orders, ISM Non-Mfg Index, EIA Petroleum Status Report
Thursday – BOE Announcement, ECB Announcement, Jobless Claims
Friday – Employment Situation, Consumer Credit
| Data as of 07/29/2011 |
1-Week |
YTD |
1-Year |
5-Year |
10-Year |
| Standard & Poor’s 500 |
-3.92 |
2.75 |
17.3 |
0.21 |
0.72 |
| Dow |
-4.24 |
4.89 |
16.0 |
1.65 |
1.66 |
| NASDAQ |
-3.58 |
3.90 |
22.4 |
6.32 |
3.58 |
| MSCI EAFE |
-2.44 |
2.80 |
16.0 |
0.35 |
3.10 |
| 10-year Treasury Note (Yield Only) |
2.96 |
NA |
3.00 |
4.99 |
5.10 |
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 U.S. dollar crept off a four-month low versus the yen and edged off a record low on the Swiss franc on Sunday as hopes the U.S. would avert a debt default grew.[iii]
Apple has more cash than Uncle Sam. As the government struggled to reach an agreement on raising the debt ceiling, the U.S. Treasury’s cash balance fell to $74 billion this week. That’s less than the $76 billion that Apple now has in cash.[iv]
The financially struggling U.S. Postal Service expects to say Tuesday it will consider closing 3,653 post offices, mostly in rural areas, an announcement certain to trigger a battle with the targeted communities. Postal officials say the agency, an independent arm of the federal government that is supported mostly by postal fees, has no choice but to downsize as people increasingly click on their computers to communicate and pay bills rather than drop letters in the mailbox.[v]
Foreclosure activity dropped during the first half of the year, compared with the first six months of 2010, in most major U.S. cities, according to a report from RealtyTrac, released on Thursday.[vi]
QUOTE OF THE WEEK:
“Your present circumstances do not determine where you can go; they merely determine where you start.” – Nido Qubein
RECIPE OF THE WEEK:
Blackberry Swirl Pie
From: Better Homes and Gardens
For a delicious dessert that is quick and easy to prepare, try this simple pie recipe.
Ingredients:
1 rolled refrigerated unbaked piecrust
1 8-oz. carton dairy sour cream
3/4 cup sugar
3 Tbsp. all-purpose flour
1/8 tsp. salt
3 cups fresh blackberries or 1 (16-oz.) pkg. frozen blackberries
Directions:
1) Preheat oven to 450 degrees F. Let frozen berries stand at room temperature for 15 minutes. Meanwhile, prepare pastry and line 9-inch pie plate. Line pastry with double thickness of foil. Bake 8 minutes. Remove foil. Bake 4 minutes more or until lightly browned. Cool on wire rack. Reduce oven to 350 degrees F.
2) In bowl combine sour cream, sugar, flour, and salt. Add blackberries and gently stir to combine. Spoon into prebaked crust. To prevent overbrowning, cover edge of pie with foil. Bake for 25 minutes (50 minutes for frozen berries). Remove foil. Bake 20 minutes more or until filling is bubbly and appears set. Cool on wire rack for 2 hours. Serve or cover and refrigerate. Makes 8 servings.
GOLF TIP OF THE WEEK:
Lose 5 Strokes in 2 Weeks
If you want to knock some strokes off your score fast, focus on your short game. About half of your shots are struck from within 60 yards of the flag. And yet, most average golfers spend all their time practicing with their driver.
If you want to see a radical improvement in your game within a week or two, you must make a radical change in the way you practice. For two weeks, devote 90 percent of your practice time to chipping and putting and only 10 percent to the full swing.
That’s right – If you want to knock off five strokes, put down the driver, leave your long clubs in the bag, and head for the practice green.
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Investment advisory services offered by Calandra Wealth Management, LLC – A Georgia Registered Investment Advisor.
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.
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