We have also sent out Client Survey’s to everyone as a way to get to know our clients better. You will see them in your mailboxes in the next few days. We look forward to getting them back and learning more about our clients and their interests. In addition, we will be sending out our invitations for our 6th annual Client Appreciation picnic next week.

Also, we reminded our attendees of our upcoming client event on April 24^th.  At that time, we will have a presentation by the Springfield Police Department regarding identity theft.  Additionally, we have contracted with a local document-shredding company to have a shredding truck on-site for clients to bring any unwanted documents.  We will shred these documents right there, and the client can watch as it is done.  This event will be held at the Executive Conference Center.  Call our office for more details.

DOMESTIC ECONOMIC HEALTH
Gas prices were putting the clamps on the consumer, right? Wrong. It seemed consumer spending was rising, perhaps partly in response to increased fuel costs. In fact, the Commerce Department said personal spending rose 0.8% in February (the biggest gain in seven months) even as incomes rose just 0.2%. As for that other really important statistic affecting consumers, the nation’s jobless rate had remained at 8.3% for February, although job growth was impressive once again (227,000 positions added to non-farm payrolls).^2,3

Consumer sentiment was the proverbial mixed bag. The Conference Board’s survey slipped from February’s revised mark of 71.6 to 70.2. The University of Michigan’s final March survey came in at 76.2, up from the 74.3 reading of late February.⁴

Consumer prices moved in a pronounced direction - and that direction was up. The federal government’s Consumer Price Index rose 0.4% in February, the biggest monthly gain since April. Producer prices matched that increase. Annualized CPI was running at 2.9%, annualized core CPI at 2.2%. What role did gasoline costs play in all this? A major one. A 6% February rise in retail gas prices represented a significant portion of the advance in the overall CPI. Pump prices have climbed close to 20% since December, and a gallon of unleaded cost $3.93 at the end of the month, up 2o cents from the end of February. Even with this price pressure on consumers, the Census Bureau said retail sales were 1.1% better in February. It also revised January’s gain up to 0.6%. Durable goods orders also rose 2.2% in February.^4,5,6,7

The U.S. manufacturing and service sectors were holding up well. The Institute for Supply Management’s March manufacturing PMI rose a full percentage point to 53.4, and its non-manufacturing index read 57.3 in February, an 0.5% gain.^8,9

The Federal Reserve conducted its annual stress test of 19 big banks in March, and 15 lenders held up under the “doomsday” scenario (Dow losing half of its value, home prices at 1996 levels, a 13% jobless rate). American Express, Bank of America, Bank of New York Mellon, BB&T, CapitalOne, Fifth Third, Goldman Sachs, JP Morgan Chase, Keycorp, Morgan Stanley, PNC, Regions, State Street, U.S. Bancorp and Wells Fargo each got a thumbs-up. The Fed felt that Citigroup, SunTrust, Ally and MetLife would lose enough assets under the scenario to pose systemic risk.¹⁰

GLOBAL ECONOMIC HEALTH
To what degree would the Eurozone economy slow down? Would Asian economies turn around their manufacturing bases? Looking to Europe, the signs were bleak. The Eurozone jobless rate ticked up to a post-euro high of 10.8% in March. In Spain, the unemployment rate was 23.6%; in France, it was 10.0%; in Italy, it was 9.3%; in Germany, it was just 5.7%. The key Markit purchasing managers index was below 50 for the eighth consecutive month in March, with analysts growing increasingly certain that the EU had slid into a recession.¹¹

As for the key economies of the Asia-Pacific region, factory output was looking better. For March, official PMIs were in reasonably good shape in China (53.1, best since last April), India (54.7), and South Korea (52.0, a one-year high). India’s inflation rate accelerated in March for the first time since October.¹²

WORLD MARKETS
Many major stock indices pulled back last month. That was not the case for the Nikkei 225, off to a roaring start in 2012 (+19.26% for Q1). The Japanese benchmark rose 3.71% last month. Germany’s DAX was up 1.30% in March and Australia’s All Ordinaries rose 0.73%. Several major indices retreated: the CAC 40 lost 0.83%, the FTSE 100 1.76%, the TSX Composite 2.41%, the Sensex 3.91%, the Hang Seng 5.57% and the Shanghai Composite 6.82%. Despite these losses, all of the above indices posted gains for the quarter. The MSCI World Index rose 1.02% in March and 10.94% for Q1 in USD terms. By the same measuring stick, the MSCI Emerging Markets Index fell 3.52% in March but rose 13.65% for the quarter.^13,14

COMMODITIES MARKETS

The hottest marquee commodity of March was (guess what) retail gasoline at +5.20%. Cotton went +3.85% last month. Most other key commodities lost their footing - most notably, natural gas. Those futures slid 18.73% in March, a descent helped by unseasonably warm weather. Oil futures lost 3.78% last month, settling at $103.02 per barrel on the NYMEX; for the quarter, prices rose 4.24%. Gold slipped 2.30% on the COMEX on the month and rose 6.71% on the quarter to wrap March at $1,671.90 on the COMEX. Copper (-1.40%) and silver (-6.23%) retreated after two strong monthly advances. RBOB gasoline futures rose 1.56% in March and the U.S. Dollar Index pulled off its first monthly gain for 2012 (+0.44%). Elsewhere, coffee futures sank 8.98%, corn lost 2.13% and wheat lost 1.09% for the month.⁶

REAL ESTATE
March didn’t bring much improvement. Interest rates on conventional mortgages did go back under 4% after topping that mark at mid-month. Looking at Freddie Mac’s March 1 and March 29 Primary Mortgage Market Surveys, we see that mortgage interest rates did increase last month: 30-year FRMs went from 3.90% to 3.99%; 15-year FRMs went from 3.17% to 3.23%; 5/1-year ARMs rose from 2.83% to 2.90%; 1-year ARMs went from 2.72% to 2.78%.¹⁵

Existing home sales fell 0.9% for the month, while new home sales pulled back 1.6%. Year-over-year, the pace of residential resales had increased 8.8% while new home buying rose 11.4%. The Census Bureau announced that the median new home sale price had risen 6.2% in a year to $233,700. The National Association of Realtors noted the first year-over-year increase in existing home prices since November 2010.   However, the January edition of the S&P/Case-Shiller Home Price Index revealed that existing home prices had essentially reset to early 2003 levels. The index posted its fifth straight monthly retreat and was down 3.8% from 12 months before. The NAR also reported a 0.5% decline in pending home sales for February.^16,17,18

LOOKING BACK…LOOKING FORWARD
Fear seemed to take a holiday: the CBOE VIX was at 15.50 on March 30 after diving 15.90% for the month. The Dow ended March at 13,212.04, the S&P at 1,408.47, the NASDAQ at 3,091.57 and the Russell 2000 at 830.30.¹

Sources: money.msn.com, bigcharts.com, treasury.gov - 3/30/12^{1,19,20,21,22}

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

Could the market put together consecutive quarters like this? While few analysts expect a repeat, Wall Street has nonetheless surprised us many times. Some analysts think the current bull market may be due to run out of steam given the apparent economic sluggishness in Europe and the tendency of some investors to “sell in May, go away.” Others think that since the S&P 500 fell 19.4% in October 2011 from an April 2011 peak (actually more than 20%, if you factor in intraday numbers rather than just the market close), we are actually more or less in a new bull market that began last fall. So would that be a baby bull within a secular bear, or something more lasting? Whether you think the glass is half full or half empty on Wall Street, the fact remains that stocks surpassed expectations in the first quarter of the year.²³

UPCOMING ECONOMIC RELEASES: Here is the slate of releases for the rest of April: the March ISM service sector index (4/4), the March unemployment report (4/6), February wholesale inventories (4/10), a new Federal Reserve Beige Book (4/11), the March PPI (4/12), the March CPI and the initial University of Michigan consumer sentiment survey for April (4/13), March retail sales and February business inventories (4/16), March industrial output, housing starts and building permits (4/17), the March Conference Board Leading Economic Indicators index and March existing home sales (4/19), March new home sales, the February Case-Shiller home price index and the Conference Board’s April consumer confidence poll (4/24), March durable goods orders and an FOMC policy announcement (4/25), March pending home sales (4/26), the federal government’s first estimate of Q1 GDP and the final April University of Michigan consumer sentiment survey (4/27), and finally the March consumer spending numbers (4/30).

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is not a solicitation or recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions - the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Nikkei 225 (Ticker: ^N225) is a stock market index for the Tokyo Stock Exchange (TSE). The Nikkei average is the most watched index of Asian stocks. The DAX 30 is a Blue Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The Hang Seng Index is a freefloat-adjusted market capitalization-weighted stock market index that is the main indicator of the overall market performance in Hong Kong. The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange. The CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. The FTSE 100 Index is a share index of the 100 most highly capitalized companies listed on the London Stock Exchange. BSE Sensex or Bombay Stock Exchange Sensitivity Index is a value-weighted index composed of 30 stocks that started January 1, 1986. The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization. The S&P/ASX All Ordinaries Index represents the 500 largest companies in the Australian equities market. The MSCI World Index is a free-float weighted equity index that includes developed world markets, and does not include emerging markets. The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The US Dollar Index measures the performance of the U.S. dollar against a basket of six currencies. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 - money.msn.com/market-news/post.aspx?post=ba5dfb2a-4c91-4d39-aa5e-f3bfb0d9bb5e&_nwpt=1 [2/29/12]

2 - www.cnbc.com/id/46902933/ [3/30/12]

3 - articles.latimes.com/2012/mar/09/business/la-fi-us-jobs-20120310 [3/9/12]

4 - briefing.com/investor/calendars/economic/2012/03/26-30 [3/30/12]

5 - www.usatoday.com/money/economy/story/2012-03-16/February-inflation-consumer-price-index/53561880/1 [3/16/12]

6 - money.msn.com/market-news/post.aspx?post=087cac64-3d67-4737-b94a-31c3ff49ba16 [3/30/12]

7 - www.census.gov/retail/marts/www/marts_current.pdf [3/13/12]

8 - www.ism.ws/ISMReport/MfgROB.cfm [4/2/12]

9 - www.ism.ws/ISMReport/NonMfgROB.cfm [3/5/12]

10 - www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/03/16/investopedia77515.DTL [3/16/12]

11 - www.bbc.co.uk/news/business-17582051 [4/2/12]

12 - www.reuters.com/article/2012/04/02/us-global-economy-asia-idUSBRE83104P20120402 [4/2/12]

13 - news.morningstar.com/index/indexReturn.html [3/30/12]

14 - mscibarra.com/products/indices/international_equity_indices/gimi/stdindex/performance.html [3/30/12]

15 - www.freddiemac.com/pmms/ [4/2/12]

16 - www.bizjournals.com/washington/news/2012/03/23/new-home-sales-slow.html [3/23/12]

17 - articles.marketwatch.com/2012-03-27/economy/31242975_1_david-m-blitzer-index-committee-index-records [3/27/12]

18 - www.latimes.com/business/money/la-fi-mo-pending-home-sales-20120326,0,3632145.story [3/26/12]

19 - montoyaregistry.com/Financial-Market.aspx?financial-market=an-introduction-to-the-stock-market&category=29 [4/2/12]

20 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F30%2F11&x=0&y=0 [3/30/12]

20 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F30%2F11&x=0&y=0 [3/30/12]

20 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F30%2F11&x=0&y=0 [3/30/12]

20 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F28%2F02&x=0&y=0 [3/30/12]

20 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F28%2F02&x=0&y=0 [3/30/12]

20 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F28%2F02&x=0&y=0 [3/30/12]

21 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/30/12]

21 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/30/12]

22 - treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm10902.pdf [1/9/02]

23 - articles.businessinsider.com/2012-03-07/markets/31131044_1_bull-market-new-bull-first-year-bull [3/7/12]

DOMESTIC ECONOMIC HEALTH
Consumer spending accounts for around 70% of the U.S. economy, so it was nice to see the biggest rise in that category in four months in January: a 0.2% increase. Consumer incomes were up 0.3% as well. Other Commerce Department statistics showed a 0.4% January gain in retail sales and a 4.0% January drop in durable goods orders (the expiring 2011 tax break on capital investment likely had something to do with that decrease). With consumer spending up, retail sales up and the jobless rate descending to 8.3% for January, the big picture of the economy looked positive.^3,4

So how did consumers feel? In a word, better. The University of Michigan’s consumer sentiment survey improved for the sixth straight month, coming at a final mark of 75.3 for February. (The gauge has not posted six consecutive months of gains in 15 years.) The Conference Board’s survey also improved in February, coming in at 70.8.^3,5

While concerns abounded about foreign manufacturing, our factory sector looked comparatively healthy, even if our premier purchasing managers index decreased in February. The Institute for Supply Management’s manufacturing PMI fell 1.7% to 52.4, but it was above 50 for the 31st consecutive month. ISM’s non-manufacturing index had come in at 56.8 for January; the 25th straight month of service sector growth.^6,7

The Labor Department noted a 0.2% January advance in consumer prices. This was only the second rise in CPI in four months. Core CPI also rose 0.2% in January. Producer prices rose 0.1% in January with a 0.4% gain in core PPI. All this looked moderate, but one spike in prices got the attention of all Americans: the price of a gallon of regular unleaded gasoline soared 8.36% in February, settling at a national average of $3.73 a gallon on February 29.^1,8

GLOBAL ECONOMIC HEALTH
As February wound down, Greece was in line for a third EU/IMF rescue package of €237 billion to attack the nation’s €350 billion in sovereign debt - €107 billion in haircuts to bond investors followed by €130 billion in loans. Was it another temporary fix to a lingering problem? If it was, it wasn’t the only continuing economic dilemma in the EU. In February, Eurozone unemployment hit a euro-era record high of 10.7% (Spain’s jobless rate is currently above 20%). The Markit Eurozone PMI came in at 49.0 for February; it hasn’t been above 50 since July. Many economists believe the EU is now in a recession.^9,1o

China’s apparent soft landing was corroborated by its latest PMI readings. Its official PMI was but 51.0 in February, up from 50.5 in January but not far from the 49.0 reading last November. Fresh data showed that Chinese consumer inflation rose 0.4% in January to 4.5% while its GDP lessened to 8.9% in Q4 2011. India’s GDP slipped to 6.1% in Q4 but its PMI remained strong at 56.6 in February; its inflation rate hit a two-year low in February.

WORLD MARKETS
Key benchmarks did well. In fact, gains occurred on all continents. Looking at data from Morningstar calculated in U.S. dollar terms, we see that the Nikkei 225 led the way, going +10.46% last month. Other February performances: DAX, +6.16%; Hang Seng, +6.04%; Shanghai Composite, +5.93%; CAC 40, +4.67%; FTSE 100, +3.34%; Sensex, +2.88%; TSX Composite, +2.20%; Australian All Ordinaries, +1.44%. The MSCI World Index rose 4.66% last month while the MSCI Emerging Markets Index climbed 5.89%.^13,14

COMMODITIES MARKETS
Oil ended the month at $107.07 a barrel (and it would climb higher to open March). Oil futures posted an 8.72% monthly gain, but that paled next to the 12.67% advance for RBOB gasoline. Natural gas even rose 4.51% on the COMEX in February. Gold actually had a losing month, with futures slipping 1.52% to $1,711.30 at the close on February 29. On the other hand, silver went +4.15% and copper went +2.36%. In crops, cotton fell 4.31%, coffee retreated 6.77%, corn gained 2.97% and wheat rose 0.30%. The U.S. Dollar Index retreated for a second straight month, going -0.78%.¹

REAL ESTATE
Existing home sales had improved again in January, and a slight decline in new home sales was offset by upward revisions to the Census Bureau’s December figures. Residential resales improved by 4.3% in the first month of the year while new home sales were down 0.9%. Both the new and existing home inventories were reduced to a 6-month supply (6.1 months for existing homes, 5.6 months for new homes), which is characteristic of a normal, healthy housing market. The National Association of Realtors said pending home sales rose 2.0% in January. In yet another positive sign, the Mortgage Bankers Association reported that there had been a 28% reduction in foreclosures in 2011. On the downside, it turned out that the S&P/Case-Shiller Home Price Index had dropped 3.8 % for December.^15,16,17

From February 2 to March 1, average home loan interest rates shifted as follows in Freddie Mac’s Primary Mortgage Market Survey: 30-year FRMs, 3.87% to 3.90%; 15-year FRMs, 3.14% to 3.17%; 5/1-year ARMs, 2.80% to 2.83%; 1-year ARMs, 2.76% to 2.72%.¹⁸

LOOKING BACK…LOOKING FORWARD
The first sixth of 2012 saw the best year-opening advance in some time for the major indices. The year-to-date numbers below represent the Dow’s best start since 1998, the NASDAQ’s best start since 2000 and the S&P’s best start since 1991. At February’s end, the Dow had settled at 12,952.07, the S&P at 1,365.68 and the NASDAQ at 2,966.89.^1,2,19

Sources: online.wsj.com, bigcharts.com, treasury.gov - 2/29/12^{2,20,21,22,23}

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

While some analysts think things are weirdly calm on Wall Street, others feel that most of the economic signs hint at a better year for the consumer, the worker and the stock market investor. Q4 GDP was recently revised up to a decent 3.0%; the jobless rate has fallen 0.7% since September; consumer spending rose in January by the most since October; the real estate market is showing signs of improvement. Hopefully, headwinds from overseas will lose some velocity and exert less drag on our economy this spring and summer.²⁴

UPCOMING ECONOMIC RELEASES: Scheduled news items across the balance of March are as follows: January factory orders and the February ISM service sector index (3/5), the February jobs report (3/9), February retail sales, January business inventories and a Federal Reserve interest rate policy announcement (3/13), February’s PPI (3/15), February’s CPI and industrial output and the initial University of Michigan consumer sentiment survey for March (3/16), February housing starts and building permits (3/20), February existing home sales (3/21), a new Conference Board Leading Economic Indicators index (3/22), February new home sales (3/23), February pending home sales (3/26), the January Case-Shiller home price index and the Conference Board’s March consumer confidence poll (3/27), February durable goods orders (3/28), the third and final estimate of Q4 GDP (3/29), and February consumer spending along with the final March University of Michigan consumer sentiment survey (3/30).

«RepresentativeDisclosure»

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is not a solicitation or recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions - the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Nikkei 225 (Ticker: ^N225) is a stock market index for the Tokyo Stock Exchange (TSE). The Nikkei average is the most watched index of Asian stocks. The DAX 30 is a Blue Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The Hang Seng Index is a freefloat-adjusted market capitalization-weighted stock market index that is the main indicator of the overall market performance in Hong Kong. The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange. The CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. The FTSE 100 Index is a share index of the 100 most highly capitalized companies listed on the London Stock Exchange. BSE Sensex or Bombay Stock Exchange Sensitivity Index is a value-weighted index composed of 30 stocks that started January 1, 1986. The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization. The S&P/ASX All Ordinaries Index represents the 500 largest companies in the Australian equities market. The MSCI World Index is a free-float weighted equity index that includes developed world markets, and does not include emerging markets. The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The US Dollar Index measures the performance of the U.S. dollar against a basket of six currencies. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 - money.msn.com/market-news/post.aspx?post=ba5dfb2a-4c91-4d39-aa5e-f3bfb0d9bb5e&_nwpt=1 [2/29/12]

2 - blogs.wsj.com/marketbeat/2012/02/29/data-points-u-s-markets-82/ [2/29/12]

3 - www.businessweek.com/printer/articles/339?type=bloomberg [3/1/12]

4 - www.reuters.com/article/2012/02/28/us-usa-economy-instant-idUSTRE81R0Y820120228 [2/28/12]

5 - www.conference-board.org/data/consumerconfidence.cfm [2/28/12]

6 - www.ism.ws/ISMReport/MfgROB.cfm [3/1/12]

7 - www.ism.ws/ISMReport/NonMfgROB.cfm [2/3/12]

8 - www.latimes.com/business/la-fi-consumer-prices-20120217,0,7037692.story [2/17/12]

9 - www.channelnewsasia.com/stories/afp_world_business/view/1186463/1/.html [3/2/12]

10 - www.reuters.com/article/2012/03/01/global-economy-wrapup-idUSL4E8E13IO20120301 [3/1/12]

11 - www.chinadaily.com.cn/china/2012-03/02/content_14735838.htm [3/2/12]

12 - www.aljazeera.com/news/asia/2012/02/201222995446384262.html [2/29/12]

13 - news.morningstar.com/index/indexReturn.html [2/29/12]

14 - mscibarra.com/products/indices/international_equity_indices/gimi/stdindex/performance.html [2/29/12]

15 - www.ft.com/cms/s/0/89e852da-5eec-11e1-a087-00144feabdc0.html#axzz1nvMnI56Z [2/24/12]

16 - www.cbsnews.com/8301-505123_162-57382754/existing-home-sales-up-inventory-down-for-now/ [2/22/12]

17 - www.charlotteobserver.com/2012/02/29/3054668/housing-slump-continues.html [2/29/12]

18 - www.freddiemac.com/pmms/ [3/1/12]

19 - montoyaregistry.com/Financial-Market.aspx?financial-market=an-introduction-to-the-stock-market&category=29 [11/2/12]

20 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F28%2F11&x=0&y=0 [2/29/12]

20 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F28%2F11&x=0&y=0 [2/29/12]

20 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F28%2F11&x=0&y=0 [2/29/12]

20 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F28%2F02&x=0&y=0 [2/29/12]

20 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F28%2F02&x=0&y=0 [2/29/12]

20 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F28%2F02&x=0&y=0 [2/29/12]

21 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/2/12]

22 - treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm10902.pdf [1/9/02]

23 - briefing.com/Investor/Calendars/Economic/Releases/employ.htm [3/2/12]

DOMESTIC ECONOMIC HEALTH
Consumers were earning more - and apparently saving more of what they earned. Personal incomes rose 0.5% in December, and so did the personal saving rate, yet personal spending was flat for the month. After consumer spending increases of only 0.1% in October and November, this seemed to hint at a slowing economy in the last quarter of 2011. However, the jobless rate was at 8.3% in January, the lowest level in three years, thanks to the addition of 243,000 jobs.^{3, 24}

Was consumer confidence wavering? It depended on which barometer you checked. The Conference Board’s January survey fell to 61.1 from December’s 64.8 final revised mark, in the previous month, according to the Conference Board. Economists polled by Reuters had thought it would climb to 68.0. The University of Michigan’s consumer sentiment survey made a major advance in January, going to 75.0 from the year-end mark of 69.9.^2,4

The initial estimate of Q4 2011 GDP arrived in late January; a growth of 2.8%, the best in six quarters, was still below the expectations of some analysts. Speaking of growth, our manufacturing sector grew for a thirtieth straight month in January, according the PMI index of the Institute for Supply Management, rising a full percentage point to 54.1. ISM’s service sector index had also posted a December advance to 52.6 from 52.0. Not surprisingly, durable goods orders improved 3.0% in December, the third consecutive monthly gain for the indicator; orders for hard goods increased 10.0% across 2011.^4,5,6,7

As for consumer and wholesale inflation, the threat was mild to say the least. In fact, the Consumer Price Index didn’t budge in December and the Producer Price Index retreated 0.1% (with import prices falling for the fourth month in five). So, 2011 goes in the books with 3.0% consumer inflation and 2.2% core inflation; the most since 2007, but hardly remarkable.⁸

GLOBAL ECONOMIC HEALTH
Efforts to restructure Greece’s debt fell apart at mid-month, but picked up some momentum. At the end of January, a deal looked imminent, but in the eyes of some analysts, investors would have to accept as much as a 70% haircut on Greekut yes of some analysts, banks would have to accept as muchce Index didn’obernsumer spending and home sales (both less than bonds to take Greece’s debt-to-GDP ratio down to a sustainable 120% or so. Last month, Standard & Poor’s downgraded credit ratings of nine EU nations: it cut ratings for France, Austria, Slovakia, Slovenia and Malta by a notch and Italy, Portugal, Spain and Cyprus by two notches, commenting that the European Union’s debt reduction plan was not of “sufficient size or scope”.^9,10

Manufacturing did pick up in some key economies in January. Our key PMI (the ISM survey) improved for the seventh straight month, and China’s official PMI improved 0.2% to 50.5 with new orders at a three-month peak. The U.K.’s PMI climbed above 50 again to 52.1. Germany’s manufacturing index advanced for the first time since September, and that helped the EU’s Markit PMI rise to 48.8 last month, but the Markit PMI has been below 50 (read: contraction) since last July. Overall, JPMorgan’s global manufacturing index rose to 51.2 last month.

WORLD MARKETS
Broadly speaking, it was a very good month for equities. Three of the BRICs posted outstanding gains: Sensex, +11.2%; RTSI, +14.1%, Bovespa, +11.1%. (The Shanghai Composite went +4.2% last month.) Argentina’s Merval pulled off a 13.2% gain and the Hang Seng rose 10.6%; the MSCI Emerging Markets Index climbed 11.2%. Other notable indices and their January performances: Dow Jones Asia Pacific Index, +8.1%; MSCI World Index, +4.9%; Nikkei 225, +4.1%; DAX, +9.5%; CAC 40, +4.4%; FTSE 100, +2.0%; KOSPI, +7.1%; All Ordinaries, +5.2%; TSX Composite, +4.2%. At the back of the pack among indices of consequence: Spain’s IBEX (-0.7%) and Malaysia’s Kuala Lumpur Composite (-0.6%).^12,13

COMMODITIES MARKETS
Metals set the pace in the sector last month. Gold fully rebounded from a poor December with a 10.91% monthly gain. Copper futures gained 10.30% and silver futures soared 19.15%. RBOB gasoline futures rose 8.79% on the NYMEX last month; retail pump prices went up 5.32%. Oil (-0.35%) and natural gas (-16.26%) retreated thanks to lessening demand and warmer weather. Key crop futures rose and fell, with coffee going -5.07% on the month, corn going -1.16%, cotton +3.09% and wheat +2.03%. The U.S. Dollar Index fell 1.37%.¹⁴

REAL ESTATE
The bad news seemed to outweigh the good news in this sector. The National Association of Realtors said that existing home sales improved 5.0% in December; in mid-January, Freddie Mac reported another record-low average interest rate for the 30-year FRM (3.88%, and a new record low would be set in early February). On the other hand, NAR reported a 3.5% dip in pending home sales in December and the November Case-Shiller Home Price Index slipped for October, its third straight monthly descent. While the Commerce Department noted that single-family home starts hit their highest level since April 2010 in December, overall housing starts dropped 4.1% for the month and new home sales slipped 2.2% to an annual rate of just 307,000. The annual new home sales pace is around 750,000 in a decent year.^8,14,15,16

Here was the change in average home loan interest rates between Freddie Mac’s December 29 and February 2 Primary Mortgage Market Surveys: 30-year FRMs, 3.95% down to 3.87%, 15-year FRMs, 3.24% down to 3.14%; 5/1-year ARMs, 2.88% down to 2.80%; 1-year ARMs, 2.78% down to 2.76%.^17,18

LOOKING BACK…LOOKING FORWARD
January was the best month for all three headline U.S. stock indices since October. The DJIA ended January at 12,632.91, the S&P 500 at 1,312.41 and the NASDAQ at 2,813.84. The CBOE VIX (the so-called “fear index”) was near 19 at month’s end.^1,2,19

Sources: online.wsj.com, bigcharts.com, treasury.gov - 1/31/12^{1,20,21,22,23}

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

We had a very nice January, and while you can’t gauge tomorrow’s market behavior off history, it is encouraging to note that the S&P 500 advanced an average of 23% during the last five years in which it gained 4% or more for January. Another nice tidbit: when the Dow has had a positive January, it has finished that year in the black 82% of the time.

Manufacturing seems to have picked up around the globe, and our manufacturing sector might be among the world’s healthiest. We still seem to be in a slow recovery, and the chance of a recession in the European Union (along with its sovereign debt morass) may exert a drag on our markets in February and beyond. Still, it looks like Greece is in line for a second IMF bailout and an actual “solution” toward its debt problem, so institutional investors might be less troubled by the EU debt crisis. If our economy goes to stall speed, the Fed could even opt for a QE3 in the coming months (a possibility in the opinion of some Wall Street analysts). February holds a lot of promise; for the first month in many, world markets may turn on headlines from America instead of Europe.

UPCOMING ECONOMIC RELEASES: Here is the schedule for the rest of the month: the initial University of Michigan consumer sentiment survey for February (2/10), January retail sales and December business inventories (2/14), January industrial output and the January 25 FOMC minutes (2/15), the January PPI and January housing starts and building permits (2/16), the January CPI and the Conference Board’s Leading Economic Indicators index for February (2/17), January existing home sales (2/22), January new home sales and the final University of Michigan consumer sentiment survey for the month (2/24), January pending home sales (2/27), January durable goods orders, the December Case-Shiller home price index and the Conference Board’s February consumer confidence poll (2/28), and the second estimate of Q4 GDP plus a new Beige Book from the Fed (2/29). The January consumer spending numbers come out on March 1.

«RepresentativeDisclosure»

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is not a solicitation or recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions - the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. BSE Sensex or Bombay Stock Exchange Sensitivity Index is a value-weighted index composed of 30 stocks that started January 1, 1986. The RTS Index (RTSI) is an index of 50 Russian stocks that trade on the RTS Stock Exchange in Moscow. The Bovespa Index is an index of about 50 stocks that are traded on the São Paulo Stock, Mercantile & Futures Exchange. The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange. The MERVAL Index (MERcado de VALores) is the most important index of the Buenos Aires Stock Exchange. The Hang Seng Index is a freefloat-adjusted market capitalization-weighted stock market index that is the main indicator of the overall market performance in Hong Kong. The Dow Jones Sustainability Asian Pacific Index (DJSI Asia Pacific) captures the leading 20% of the top 600 companies in developed Asia Pacific Markets in terms of sustainability. Nikkei 225 (Ticker: ^N225) is a stock market index for the Tokyo Stock Exchange (TSE). The Nikkei average is the most watched index of Asian stocks. The DAX 30 is a Blue Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. The FTSE 100 Index is a share index of the 100 most highly capitalized companies listed on the London Stock Exchange. The KOSPI Index is a capitalization-weighted index of all common shares on the Korean Stock Exchanges. The S&P/ASX All Ordinaries Index represents the 500 largest companies in the Australian equities market. The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization. The IBEX 35 is the benchmark stock market index of the Bolsa de Madrid, Spain’s principal stock exchange. The Kuala Lumpur Composite (FTSE Bursa Malaysia KLCI) comprises the largest 30 companies listed on the Malaysian Main Market by full market capitalization that meet the eligibility requirements of the FTSE Bursa Malaysia Index Ground Rules. The MSCI World Index is a free-float weighted equity index that includes developed world markets, and does not include emerging markets. The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The US Dollar Index measures the performance of the U.S. dollar against a basket of six currencies. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 - blogs.wsj.com/marketbeat/2012/01/31/data-points-u-s-markets-77/ [1/31/12]
2 - www.cnbc.com/id/46203174/ [1/31/12]

3 - www.nytimes.com/2012/01/31/business/economy/incomes-rise-but-spending-is-flat.html [1/30/12]

4 - www.cnbc.com/id/46162429 [1/27/12]

5 - www.ism.ws/ISMReport/MfgROB.cfm [2/1/12]

6 - www.ism.ws/ISMReport/NonMfgROB.cfm [1/5/12]

7 - www.marketwatch.com/story/durable-goods-orders-up-strong-30-in-december-2012-01-26-92200 [1/26/12]

8 - www.businessweek.com/news/2012-01-20/consumer-prices-in-u-s-little-changed-as-fuel-costs-fall.html [1/20/12]

9 - blogs.wsj.com/marketbeat/2012/02/01/how-to-read-a-greek-debt-deal/ [2/1/12]

10 - money.msn.com/market-news/post.aspx?post=a677f0ec-38f9-432c-bbc1-fb98c5362013 [1/13/12]

11 - www.reuters.com/article/2012/02/01/us-global-economy-idUSTRE8101C520120201 [2/1/12]

12 - online.wsj.com/mdc/public/page/2_3022-intlstkidx.html [1/31/12]

13 - mscibarra.com/products/indices/international_equity_indices/gimi/stdindex/performance.html [1/31/12]

14- money.msn.com/market-news/post.aspx?post=cb1f3e7e-3c74-45b7-9f9a-4cccd825c584 [1/31/12]

15 - www.businessweek.com/news/2012-01-26/contracts-to-buy-u-s-homes-near-19-month-high-economy.html [1/26/12]

16 - www.foxbusiness.com/news/2012/01/26/us-new-homes-sales-drop-22-prices-fall/ [1/26/12]

17 - www.freddiemac.com/pmms/ [2/2/12]

18 - www.freddiemac.com/pmms/index.html?year=2011 [2/2/12]

19 - montoyaregistry.com/Financial-Market.aspx?financial-market=an-introduction-to-the-stock-market&category=29 [11/2/12]

20 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F31%2F11&x=0&y=0 [1/31/12]

20 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F31%2F11&x=0&y=0 [1/31/12]

20 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F31%2F11&x=0&y=0 [1/31/12]

20 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F31%2F02&x=0&y=0 [1/31/12]

20 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F31%2F02&x=0&y=0 [1/31/12]

20 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F31%2F02&x=0&y=0 [1/31/12]

21 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [1/31/12]

22 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [1/31/12]

23 - treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm10902.pdf [1/9/02]
24 - washingtonpost.com/business/economy/us-adds-243k-jobs-in-january-unemployment-rate-drops-to-83percent/2012/02/03/gIQAhV3mmQ_story.html [2/3/12]

DOMESTIC ECONOMIC HEALTH
Three developments stand out from December: the improvement in retail sales during the holiday season, the significant drop in the unemployment rate and the approval of a two-month extension of the payroll tax cut.

While we learned that consumer spending had increased just 0.1% in November, the numbers out of the malls and power centers in December were encouraging. According to the International Council of Shopping Centers index, same-store sales during the holiday season were up 4.5% over 2010. Gauging online retail sales from the start of November through Christmas Day, market research firm ComScore Inc. estimated e-commerce purchases rose by 15% year-over-year. Consumer confidence also improved. Last month’s poll from the Conference Board reached its highest level since April (64.5) and the University of Michigan’s final December survey showed its index at 69.9, the best reading since June.^2,3,4

Early in the month, the Labor Department said the jobless rate had dropped 0.4% in November to 8.6%, with unemployment down 1.5% since a high point in October, 2009. Underemployment stood at 15.6 in November. Non-farm payrolls marked their fourteenth consecutive month of expansion.⁵

The U.S. service and manufacturing sectors were growing, by the estimate of the Institute for Supply Management’s latest PMIs. ISM’s service sector index came in at 52.0 for November, down 0.9 from October; its December manufacturing index rose 1.2 points to 53.9. Durable goods orders were up 3.8% in November (+0.3% with the transportation category factored out).^2,6,7

Inflation showed signs of easing. Consumer prices, as measured by the Bureau of Labor Statistics, were flat in November. Annualized consumer inflation was at 3.4%, declining for the second straight month. Wholesale inflation rose 0.3% in November with the year-over-year gain in the Producer Price Index reaching 5.7%.^8,9

After another notable partisan fight, Congress passed an extension of the payroll tax holiday through the end of February, meaning Social Security taxes would stand at 4.2% for at least another two months. Long-term unemployment benefits were also extended through February 29 as a result of the legislation, and Medicare payments to physicians were allowed to remain at current levels through that date.¹⁰

GLOBAL ECONOMIC HEALTH
Last month, 25 of 27 economists responding to a BBC survey predicted a mild recession across Europe. German Chancellor Angela Merkel stated that 2012 “will no doubt be more difficult than 2011″ for her country, while new Italian president Giorgio Napolitano called for sacrifices by taxpayers to ward off the threat of “financial collapse.” In another BBC poll, a majority of economists polled stated that the chances of a future Eurozone breakup were 30-40%.

As gloomy as these pronouncements sound, there were positive signals in world manufacturing at the end of 2011. While the December Markit Economics PMI showed sector contraction in Germany, France and Italy, the overall index rose half a point to 46.9. Manufacturing indexes in the United Kingdom, China, Australia, Singapore and Switzerland all improved last month. In another unexpected good sign, German unemployment dropped to 6.8%.¹⁴

WORLD MARKETS
Some of the world’s benchmark indices managed advances last month; some did not. The gains to note (these figures are from Morningstar and in U.S. dollar terms): Hang Seng, +2.67%; FTSE 100, +1.21%; Nikkei 225, +0.25%; CAC 40, +0.16%. The losses were deeper: All Ordinaries, -1.06%; TSX Composite, -2.04%; DAX, -3.13%; Sensex, -4.15%; Shanghai Composite, -5.74%. The MSCI World and MSCI Emerging Markets indices had another down month: the World fell 0.17% and the Emerging Markets slipped 1.29%. Among the above indices, the FTSE 100 (-5.55%) and MSCI World (-7.61%) held up best in 2011. At the back of the pack, we find the Shanghai Composite (-21.68%) and the Sensex (-24.64%).^15,16

COMMODITIES MARKETS
Was gold overvalued? That perception may have strongly influenced its December performance; it dropped 10.48% for the month. Oil fared better but still retreated, losing 1.52% in December. Still, they both had annual gains: gold went +10.23% for 2011 (settling at $1,566.80 on December 30) and oil went +8.15% for the year (ending 2011 at $98.83 a barrel). Silver and copper respectively lost 14.90% and 3.90% in December. They had poor years: copper lost 22.73% for 2011, silver lost 9.77%. Natural gas went -15.80% on the month and lost 32.15% for 2011. Key crop futures did well in December: wheat went +6.31%, corn +6.32% and cotton +0.85%. Still, wheat (-17.82%) and cotton (-36.69%) took dives on the year. The U.S. Dollar Index was up for the second straight month (+2.59%) to finish +1.56% for 2011.¹⁷

REAL ESTATE
For once, the news across this sector was mostly good. (When was the last time that happened?) The Census Bureau said that new home sales were up 1.6% in November to the best sales pace since April. The National Association of Realtors noted a 4.4% rise in existing home sales in November, matching a pace unseen since January. Pending home sales reached a 19-month peak in November as well. Housing starts also increased by 9.3% in November. The October edition of the S&P/Case-Shiller Home Price Index, released in late December, slipped 1.2% from its September level.^18,19,20

Freddie Mac’s December 29 Primary Mortgage Market Survey showed average interest rates on 30-year FRMs at 3.95%, average rates on 15-year FRMs at 3.24% and average rates on 5/1-year ARMs at 2.88%; these were all slightly below rates in the December 1 PMMS. Rates on 1-year ARMs averaged 2.78% in both surveys.²¹

LOOKING BACK…LOOKING FORWARD
The Dow wound up in the black for 2011 largely due to a record-setting fourth quarter, seeing the biggest quarterly point ascent in DJIA history. The Dow gained 11.95% in the quarter, and that was actually topped by the Russell 2000, which went +15.02% for 4Q 2011 yet finished at -5.45% for the year.¹

Sources: cnbc.com, bigcharts.com, treasury.gov - 12/30/11^1,22,23,24

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

January opened with a triple-digit climb for the Dow, a good sign if you believe in the old “January effect” theory. S&P Cap IQ chief strategist Sam Stovall recapped the premise for CNBC: “An up first week in the market usually signals an up January and as goes January, so goes the year. Since 1945, whenever the market has been up in January it has been up for the entire year 88% of the time.” Of course, past performance is no basis for future results: the S&P 500 advanced 2.26% for January 2011 and finished flat for the year. If our economy continues to improve, perhaps it will provide sufficient distraction from the debt crisis in the EU and the potential for recession in European and Asian economies to promote gains for U.S. stocks.^25,26

UPCOMING ECONOMIC RELEASES: For the balance of January, the economic news items look like this: November factory orders and December auto sales (1/4), the December ISM service sector index (1/5), the December unemployment report (1/6), a new Fed Beige Book (1/11), the December retail sales numbers from the Census Bureau (1/12), January’s initial University of Michigan consumer sentiment survey (1/13), December’s PPI and industrial output (1/18), the December CPI plus December housing starts and building permits (1/19), December existing home sales (1/20), December’s pending home sales report from the NAR and a Fed interest rate decision (1/25), December new home sales and durable goods orders plus the Conference Board’s December Leading Economic Indicators index (1/26), the final University of Michigan January consumer sentiment survey and the BEA’s first take on 4Q GDP (1/27), the Commerce Department’s report on December consumer spending (1/30), and finally the November Case-Shiller home price index and the Conference Board’s January consumer confidence poll (1/31).

«RepresentativeDisclosure»

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is not a solicitation or recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions - the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. The Hang Seng Index is a freefloat-adjusted market capitalization-weighted stock market index that is the main indicator of the overall market performance in Hong Kong. The FTSE 100 Index is a share index of the 100 most highly capitalized companies listed on the London Stock Exchange. Nikkei 225 (Ticker: ^N225) is a stock market index for the Tokyo Stock Exchange (TSE). The Nikkei average is the most watched index of Asian stocks. The CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. The S&P/ASX All Ordinaries Index represents the 500 largest companies in the Australian equities market. The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization. The DAX 30 is a Blue Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. BSE Sensex or Bombay Stock Exchange Sensitivity Index is a value-weighted index composed of 30 stocks that started January 1, 1986. The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange. The MSCI World Index is a free-float weighted equity index that includes developed world markets, and does not include emerging markets. The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The US Dollar Index measures the performance of the U.S. dollar against a basket of six currencies. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 - www.cnbc.com/id/45824871 [12/30/11]

2 - www.reuters.com/article/2011/12/23/us-usa-economy-idUSTRE7BM0AB20111223 [12/23/11]

3 - latimesblogs.latimes.com/money_co/2011/12/holiday-shopping-lift-christmas.html [12/28/11]

4 - www.csnews.com/top-story-confidence_surges_on_better_employment_outlook-60179.html [12/28/11]

5 - online.wsj.com/article/SB10001424052970204464404577112680918832116.html [1/3/12]

6 - www.ism.ws/ISMReport/NonMfgROB.cfm [12/5/11]

7 - www.ism.ws/ISMReport/MfgROB.cfm [12/1/11]

8 - www.reuters.com/article/2011/12/16/us-economy-idUSTRE7BE12S20111216 [12/16/11]

9 - www.businessweek.com/ap/financialnews/D9RL8CRG0.htm [12/15/11]

10 - money.cnn.com/2011/12/23/news/economy/payroll_tax_cut_deal/ [12/23/11]

11 - news.bbc.co.uk/today/hi/today/newsid_9669000/9669315.stm [12/30/11]

12 - www.bbc.co.uk/news/world-europe-16377010 [1/1/12]

13 - www.bbc.co.uk/news/business-16382874 [1/2/12]

14 - www.bloomberg.com/news/2012-01-03/global-manufacturing-displays-resilience-to-europe-s-debt-crisis-economy.html [1/3/11]

15 - news.morningstar.com/index/indexreturn.html [12/30/11]

16 - mscibarra.com/products/indices/international_equity_indices/gimi/stdindex/performance.html [12/30/11]

17 - money.msn.com/market-news/post.aspx?post=7a929e98-4d99-44cb-98c9-a0ef1c3151c4 [12/30/11]

18 - www.businessweek.com/news/2011-12-23/sales-of-u-s-new-homes-in-november-rise-to-315-000-rate.html [12/23/11]

19 - www.reuters.com/article/2011/12/27/us-economy-idUSTRE7BE12S20111227 [12/27/11]

20 - www.realtor.org/press_room/news_releases/2011/12/phs_nov [12/29/11]

21 - www.freddiemac.com/pmms/ [1/3/12]

22 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F31%2F01&x=0&y=0 [12/30/11]

22 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F31%2F01&x=0&y=0 [12/30/11]

22 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F31%2F01&x=0&y=0 [12/30/11]

23 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [12/30/11]

23 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [12/30/11]

24 - www.treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm71101.pdf [7/11/01]

25 - montoyaregistry.com/Financial-Market.aspx?financial-market=an-introduction-to-the-stock-market&category=29 [11/2/11]

26 - cnbc.com/id/45848630/ [1/2/12]

27 - blogs.wsj.com/marketbeat/2011/01/31/data-points-us-markets-342/ [1/31/11]

The fourth quarter has arrived, and with it comes hopes of respite from a summer in which bearish sentiment reigned. The third quarter of 2011 was frustrating for Wall Street; if certain things happen, the fourth quarter could end up demonstrably better. Let’s review the events of the past three months.

The quarter in brief. The Dow retreated 12.09% in the third quarter of 2011, its poorest quarterly showing since the first quarter of 2009. The debt troubles of a small European nation (and the fear of their contagion) kept U.S. markets down as much as a host of lackluster domestic economic indicators. Confidence waned on Wall Street and Main Street, and analysts began to second-guess the recovery. The real estate sector did show some year-over-year improvement, and consumer spending did not diminish. Investors hoped for better days while taking a pragmatic view of the near future.1

Domestic economic health. The economy crawled forward, with occasional flashes of vigor. Consumer spending increases partly reflected notable jumps in food and energy costs. Personal spending jumped 0.7% in July and rose another 0.2% in August. Personal incomes actually slipped 0.1% in August, the first time that had happened in nearly two years.2,3

As for consumer prices, they rose 0.5% in July and 0.4% in August after decreasing 0.2% in June. By August, annualized inflation was running at 3.8%; energy prices had risen 18.4% in 12 months. Retail sales rose 0.3% in July but were flat in August. Commerce Department data showed durable goods orders at an impressive +4.1% in July but just -0.1% for August.4,5,6

The jobless rate remained stuck at 9.1% in July and August. By August, it had been 9% or higher in every month since May 2009. Consumer confidence plunged, with a mild rebound late in the quarter. The final September University of Michigan survey improved to 59.4, rebounding from the lowest level since November 2008 in August (55.7).The Conference Board’s September number of 45.4 was little changed from the 45.2 of August (lowest since April 2009).3,7

Some of this was frustration over Washington. After the long debate in Congress regarding the nation’s debt ceiling, Standard and Poor’s downgraded America’s credit rating a notch to AA+, which was detrimental to global stocks. President Obama called for bipartisan unity as he introduced the $447 billion American Jobs Act late in the quarter, but some Republicans were loath to support a job creation measure that would be funded partly by income tax hikes. (In early October, Senate Democrats proposed including a 5% tax hike for millionaires in the bill.) The Federal Reserve did not haul out QE3, instead choosing to bring back its 1961 “Operation Twist” strategy of shifting $400 billion into longer-term Treasuries to foster growth, a move that kicked off this month.8,9,10,32

The Institute for Supply Management’s manufacturing and non-manufacturing indices hinted at slower growth. ISM’s manufacturing gauge read 55.3 in June, but just 51.6 by September; its service sector index was at 53.3 in June and managed a 53.0 reading for September.11,12

Global economic health. Hopes that Greece could avoid default seemed to fade as the quarter proceeded, with some economists contending it wasn’t a matter of if but when. Wall Street hoped for decisive action from the European Union this summer, maybe even a revamp of its business model; that didn’t happen. In August, German chancellor Angela Merkel and French president Nicolas Sarkozy proposed that all 17 EU nations write and pass constitutional balanced-budget amendments, and called for an EU-wide tax on financial transactions in 2012 and a joint-governance council that would meet twice yearly to try and fine-tune the Eurozone economy. Wall Street would have preferred that the EU create a Eurobond that could help cut borrowing costs for debt-plagued nations or bolster its bailout fund. At quarter’s end, the EU was voting on whether to strengthen the bailout fund, but its leaders had thrown out a measure that would allow management of the euro via a council of heads of state instead of a central bureaucratic arm.13,14

Asian economies contended with a clear drop in export demand. China’s official PMI was at 50.9 by September, exactly where it was in June and well below the historical 55.7 average for the month. Japan’s manufacturing sector contracted in September for the first time since April. Taiwan’s manufacturing index contracted each month of the quarter, hitting a 32-month low of 44.5 in September; India’s PMI dropped 2.2% to 50.4 in that month, its biggest monthly retrenchment since November 2008. One silver lining here: this slowdown could help to foster a soft landing for the Chinese and Indian economies, in which inflation exceeds central bank targets.15

World markets. The quarterly descents were severe. Data from Morningstar (all of this is in U.S. dollar terms) tells the story: Sensex, -11.40%; CAC 40, -25.12%; FTSE 100, -13.74%; Hang Seng, -21.26%; Nikkei 225, -11.37%; All Ordinaries, -12.66%; TSX Composite, -11.39%; Shanghai Composite, -14.59%; DAX, -25.41%. The MSCI World and Emerging Markets indices respectively dropped 17.06% and 23.19% last quarter.16,17

Commodities markets. At the end of the quarter, gold was the only precious metal posting a YTD gain (+14.1%) on the heels of its twelfth straight quarterly advance (+7.9%). Other marquee metals had it rough in the quarter: silver lost 13.6%, platinum fell 11.7%, palladium dived 19.2% and copper plunged 26.0%. Soybeans lost 9.7% in 3Q 2011, and the Dow Jones-UBS Commodity Index took an 11.3% quarterly hit. NYMEX crude lost exactly 17% on the quarter, with prices settling at $79.20 a barrel on September 30. As for the U.S. Dollar Index … it gained 5.7% for the quarter.18,19,20,21

Real estate. The sector was far from healed, but there was some annualized improvement. While new and existing home sales wavered month-to-month, August data showed them respectively 18.6% and 18.8% above year-ago levels (existing home purchases unexpectedly were up 7.7% in August). By August, pending home sales also registered a 12-month gain (+7.7%). The latest available S&P/Case-Shiller Home Price Index (July edition) still showed prices down 4.1% year-over-year.22,23,24,25,26

Mortgages grew even cheaper. Freddie Mac’s Primary Mortgage Market Survey showed the following quarterly descents in average interest rates from June 30 to September 29: 30-year FRMs, 4.51% to 4.01%; 15-year FRMs, 3.69% to 3.28%; 5-year ARMs, 3.22% to 3.02%; 1-year ARMs, 2.97% to 2.83%.27

Looking back … looking forward. Standing alone, the 3Q numbers might look like a bad Wall Street year. It was a quarter in which the Russell 2000 (-22.15%) tumbled into a bear market and the CBOE VIX (+159.32%) took off.1

Sources: online.wsj.com, bigcharts.com, treasury.gov, treasurydirect.gov - 9/30/111,28,29,30
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.

On October 4, the S&P 500 was flirting with bear market territory (down 19.4% from its April 2011 high). So what will have to happen to help this market climate improve this fall? There are three potential catalysts that might emerge. One, a decisive and truly unified effort by the EU to address the debt crisis in Greece, Spain and Italy and arrange an orderly default for Greece. Two, a strong corporate earnings season featuring frequent, pleasant surprises. Three, a stream of data vouching that the economy is still growing – indicators that clearly do not hint at a recession.

As you may know, the fourth quarter tends to be a very good one for Wall Street: across the last 50 years, stocks have gained an average of 3.6% in the last three months of a year. Let’s hope the historical pattern repeats in 2011.31

Hopefully, some bullish sentiment will wander back onto Wall Street before 2011 ends, perhaps enough to notably reverse some of the YTD numbers above. Early in January, I’ll send you a fourth quarter wrap-up. Should you have any pressing financial questions or concerns in the meantime, feel free to contact us.

Sincerely yours,

Holmes & Griffeth, Inc.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. BSE Sensex or Bombay Stock Exchange Sensitivity Index is a value-weighted index composed of 30 stocks that started January 1, 1986. The CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. The FTSE 100 Index is a share index of the 100 most highly capitalized companies listed on the London Stock Exchange. The Hang Seng Index is a free-float capitalization-weighted index of selection of companies from the Stock Exchange of Hong Kong. Nikkei 225 (Ticker: ^N225) is a stock market index for the Tokyo Stock Exchange (TSE). The Nikkei average is the most watched index of Asian stocks. The S&P/ASX All Ordinaries Index represents the 500 largest companies in the Australian equities market. The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization. The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange. The DAX 30 is a Blue Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The MSCI World Index is a free-float weighted equity index that includes developed world markets, and does not include emerging markets. The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The Dow Jones-UBS Commodity Index DJ-UBSCI is a broadly diversified index that allows investors to track commodity futures through a single, simple measure. It currently has 19 commodity futures in seven sectors. The US Dollar Index measures the performance of the U.S. dollar against a basket of six currencies. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.
1 - cnbc.com/id/44729786 [9/30/11]
2 - bea.gov/newsreleases/national/pi/pinewsrelease.htm [9/30/11]
3 - businessweek.com/news/2011-09-30/consumer-sentiment-in-u-s-increases-more-than-forecast.html [9/30/11]
4 - bls.gov/news.release/pdf/cpi.pdf [6/29/11]
5 - nytimes.com/2011/09/15/business/economy/retail-sales-and-producer-prices-unchanged-in-august.html [9/14/11]
6 - reuters.com/article/2011/09/28/us-usa-economy-idUSTRE78C33C20110928 [9/28/11]
7 - businessweek.com/ap/financialnews/D9PP5NB00.htm [9/15/11]
8 - nytimes.com/2011/08/06/business/us-debt-downgraded-by-sp.html [8/5/11]
9 - foxnews.com/politics/2011/10/05/reid-proposes-millionaire-surtax-to-pay-for-jobs-bill-boehner-calls-move/ [10/5/11]
10 - sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/09/22/bloomberg_articlesLRXZ2L0D9L35.DTL [9/22/11]
11 - partners.briefing.com/schwab/Calendars/EconomicReleases/napm.htm [10/3/11]
12 - partners.briefing.com/schwab/Calendars/EconomicReleases/napmserv.htm [10/5/11]
13 - reuters.com/article/2011/08/16/eurozone-francogerman-idUSLDE77F12B20110816 [8/16/11]
14 - thenewstribune.com/2011/09/29/1844801/stocks-jump-after-unemployment.html [9/29/11]
15 - articles.economictimes.indiatimes.com/2011-10-03/news/30238580_1_export-orders-factory-activity-asian-economies [10/3/11]
16 - news.morningstar.com/index/indexreturn.html [9/30/11]
17 - mscibarra.com/products/indices/international_equity_indices/gimi/stdindex/performance.html [9/30/11]
18 - blogs.wsj.com/marketbeat/2011/09/30/data-points-energy-metals-525/ [9/30/11]
19 - bullionpricestoday.com/bullion-prices-mixed-in-third-quarter-2011/ [9/30/11]
20 - online.wsj.com/article/SB10001424052970203405504576601051001862300.html [10/3/11]
21 - online.wsj.com/mdc/public/npage/2_3051.html?mod=mdc_curr_dtabnk&symb=DXY [10/5/11]
22 - realtor.org/press_room/news_releases/2011/09/ehs_aug [9/21/11]
23 - census.gov/const/newressales.pdf [9/26/11]
24 - realtor.org/press_room/news_releases/2011/09/phs_august [9/29/11]
25 - montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [10/5/11]
26 - articles.latimes.com/2011/sep/28/business/la-fi-home-prices-20110928 [9/28/11]
27 - freddiemac.com/pmms/ [10/3/11]
28 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F30%2F10&x=0&y=0 [9/30/11]
28 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F30F2%2F10&x=10&y=18 [9/30/11]
28 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F30%2F10&x=0&y=0 [9/30/11]
28 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F1%2F01&x=0&y=0 [9/30/11]
28 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F1%2F01&x=0&y=0 [9/30/11]
28 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F1%2F01&x=0&y=0 [9/30/11]
29 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [10/5/11]
30 - treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm71101.pdf [7/11/01]
31 - usatoday.com/money/world/story/2011-10-03/world-markets-down/50640738/1 [10/4/11]
32 - money.cnn.com/2011/09/21/news/economy/federal_reserve_operation_twist/index.htm [09/22/11]

HOMEBUYING TAPERS OFF IN SEPTEMBER
Existing home sales decreased by 3.0% last month, according to the National Association of Realtors. At this rate, about 4.91 million previously occupied homes will be sold in 2011, matching the total for 2010. In a normal year, about 6 million residential resales occur in the real estate sector.²

HOUSING STARTS UP 15%
Here’s a good sign for residential real estate: a sign of demand. Most of the 15.0% monthly increase in September came from apartment construction; the Commerce Department reported a 53% monthly jump in that category. Single-family construction improved by 1.7%. Overall, there were 658,000 housing starts last month, the best number in any month since April 2010.³

DOW EXTENDS WINNING STREAK
Wall Street rallied Friday on the eve of the crucial summit meeting to address the Eurozone debt crisis, helped by news that a new aid package for Greece had been approved by EU finance ministers. The DJIA gained ground for the fourth week in a row; the S&P 500 also advanced. The weekly numbers: S&P 500, +1.12% to 1,238.25; DJIA, +1.41% to 11,808.79; NASDAQ, -1.14% to 2,637.46.^4,5

THIS WEEK: Earnings season is in full swing. Monday, earnings reports from Netflix, Amgen, Caterpillar and Texas Instruments hit the Street. On Tuesday, BP, Deutsche Bank, Amazon.com, Broadcom, DuPont, UBS and 3M issue 3Q results … and the August Case/Shiller Home Price Index comes out along with the Conference Board’s October gauge of consumer confidence. On Wednesday, quarterly results arrive from Boeing, VISA, GlaxoSmithKline, Sprint, ConocoPhillips and Ford and we have data on September new home sales and durable goods orders. Thursday brings the initial estimate of 3Q GDP and the data on September pending home sales, plus earnings from ExxonMobil, Occidental Petroleum, Baidu, P&G, Aetna, Bristol-Myers Squibb, Time Warner Cable, Hershey and Motorola Solutions. Friday, earnings from Merck and Chevron come out along with the report on September consumer spending and October’s final University of Michigan consume r sentiment index.

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov - 10/21/11^4,5,6,7,8

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 - nytimes.com/2011/10/20/business/economy/us-consumer-inflation-subdued-housing-starts-up.html [10/19/11]

2 - ajc.com/business/sales-of-previously-occupied-1206303.html [10/20/11]

3 - thestreet.com/story/11283665/1/raise-the-roof-housing-starts-up-15-in-september.html [10/20/11]

4 - montoyaregistry.com/Financial-Market.aspx?financial-market=an-introduction-to-the-stock-market&category=29 [10/21/11]

5 - cnbc.com/id/44988273 [10/21/11]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F21%2F10&x=0&y=0 [10/21/11]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F21F2%2F10&x=10&y=18 [10/21/11]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F21%2F10&x=0&y=0 [10/21/11]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F20%2F06&x=0&y=0 [10/21/11]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F20%2F06&x=0&y=0 [10/21/11]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F20%2F06&x=0&y=0 [10/21/11]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F22%2F01&x=0&y=0 [10/21/11]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F22%2F01&x=0&y=0 [10/21/11]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F22%2F01&x=0&y=0 [10/21/11]

7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [10/21/11]

7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [10/21/11]

8 - treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm71101.pdf [7/11/01]

Our next meeting will be in January. Watch your newsletters and e-mails for the specific date and time. Given that it will be tax time for us, our special topic at the next meeting will revolve around a discussion on various tax planning strategies for our clients. So, keep an eye out for a notification.