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Weekly Market Update
Week of March 14, 2011
The Markets:

On Friday, an 8.9 earthquake rocked Japan and generated a 30-foot-high tsunami that devastated the northeastern coast.  In consideration of the widespread destruction, human suffering is the issue of primary concern at this time.  Simultaneously though, it is crucial to consider the economic impact of this natural disaster.  What affects are we already experiencing?

Though Japan's recession-burdened stock markets dropped,[1] the expected scope of the rebuilding effort sent U.S. stocks climbing on expectations for increased demand for materials.[2]   Interestingly, we also saw a $3 a barrel drop in oil prices inspired by anticipation of decreased Japanese demand.[3]  At the same time, some speculate that the probable increase in Japan's spending has the potential to propel their already strong currency, the yen, higher as Japanese money invested abroad is applied to rebuilding.[4]  How long and to what extent such factors will influence the world economy remains to be seen.

 

The earthquake also took a heavy toll on the nation's industries, forcing Toyota, Honda and Nissan to halt operations at most of their domestic plants.[5]  These shutdowns come at a time of strong recovery in global consumption (U.S. auto sales clocked their strongest pace in 18 months in February[6]).  Also suspending operations are Panasonic, Sony, and Toshiba.[7]  A bigger impact will likely come in the weeks ahead as the disruptions make their way through the global supply chain.

 

In today's world, we exist as part of a connected, global community.  And although it is fitting to discuss how international situations can have an impact domestically, we should also remember that such analysis cannot diminish Japan's catastrophic losses.  While the weeks and months ahead will gradually reveal the extent of the disaster, it will also give us a chance to demonstrate our humanity and generosity.

SPECIAL NOTE:

While we do not want to discourage you from donating toward relief efforts in Japan, we urge you to exercise caution. Whenever a natural disaster strikes, there are always unscrupulous individuals who will attempt to take advantage of the generosity of those who wish to give.  Many reputable sources warn donors to be cautious when making contributions to relief agencies and charities.  Please visit the Better Business Bureau's Wise Giving Alliance for more information about how to donate safely. See www.bbb.org/charity.

ECONOMIC CALENDAR:                                        
Tuesday - Empire State Mfg Survey, Import and Export Prices, Treasury International Capital, Housing Market Index, FOMC Meeting    Announcement                                         
Wednesday - Housing Starts, Producer Price Index, EIA Petroleum Status Report
Thursday - Consumer Price Index, BOE Announcement, International Trade, Jobless Claims, Industrial Production, Leading Indicators, Philadelphia Fed Survey

 

Performance


03_14_2011_graph

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.

Highlights:

Professional-football players disbanded their union and filed a lawsuit against the NFL and team owners on Friday.  The collapse of the talks makes it likely that NFL owners will bar their players from turning up to work and withholding their paychecks. The players filed suit for the right to be allowed to work.[8]

 

U.S. consumer sentiment fell to its lowest level since October 2010 as gasoline prices rose. The preliminary March reading on the overall index on consumer sentiment came in at 68.2, down from 77.5 in February.  The numbers were in contrast to the retail sales report earlier Friday, which showed sales posted their largest gain in four months in February.[9]

 

House Republicans are preparing another stopgap-spending bill that would cut $6 billion from current levels and keep the government running for three more weeks.  The stopgap-spending bill would buy lawmakers more time after existing funding authority expires on March 18 to agree on final spending levels for the 2011 fiscal year, which ends September 30. The Senate would have to approve it as well before it could be sent to President Obama to sign into law.[10]

 

Forbes 2011 Billionaires List breaks two records: total number of listees (1,210) and combined wealth ($4.5 trillion).  Mexico's Carlos Slim Helu, added $20.5 billion to his fortune, and is now worth $74 billion. Bill Gates (#2) and Warren Buffett (#3) both added a more modest $3 billion to their piles and are now worth $56 billion and $50 billion, respectively. [11]


 

Quote of the Week
"In separateness lies the world's great misery,
in compassion lies the world's true strength." - Buddha
Recipe of the Week

Maple Ricotta Flan


03_14_2011_recipe

From: Better Homes and Gardens
This 5-ingredient dessert can be pulled together in just 15 minutes.


Servings: Makes 6 servings.
Prep: 15 mins
Total: 45 mins

Ingredients:
1/4 cup plus 1 tsp. pure maple syrup
4   beaten eggs
1 15-oz. container ricotta cheese
1/4 cup sugar
1 tsp. vanilla
Ground nutmeg or cinnamon (optional)

Directions:
1. Preheat oven to 325 degrees F. Divide the 1/4 cup maple syrup among six 6-ounce custard cups; tilt custard cups to coat bottoms evenly.

2. In a bowl combine eggs, cheese, sugar, vanilla, and remaining teaspoon maple syrup. Mix until well combined but not foamy. Place the custard cups in a 3-quart rectangular baking dish. Divide egg mixture among custard cups. Sprinkle with nutmeg. Place the baking dish on an oven rack. Pour boiling water into the baking dish around custard cups to a depth of 1 inch. Bake for 40 to 45 minutes or until a knife inserted near the centers comes out clean.|

3. Remove cups from water. Cool completely in custard cups. Cover and chill until serving time. To unmold flans, loosen edges with a knife, slipping point of knife down sides to let air in. Invert a dessert plate over each flan; turn custard cup and plate over together.

Golf Tip of the Week

Putting Yips?


Once fear gets a hold on your nervous system, it can seem like it will never end. Goodbye confidence.  What can you do?  Solve the problem by taking two actions:

 

1)    Spot the fear early. When spotted, step back, take a breath, and restart your routine. Once your body/mind learns you won't give in to your nerves, it actually gets the message.

2)    Put your mind on the present, not the future. Don't think about everything that can go wrong with your shot. Just focus on your movement. 

 

Following this routines brings you into the "now." Use this to combat fear.

 

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Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

 

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.

 

The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq. The DJIA was invented by Charles Dow back in 1896.

 

The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indexes from Europe, Australia and Southeast Asia.

 

The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

 

Google Finance is the source for any reference to the performance of an index between two specific periods.

 

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

 

Past performance does not guarantee future results.

 

You cannot invest directly in an index.

 

Consult your financial professional before making any investment decision.

 

Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.

 

These are the views of Platinum Advisor Marketing Strategies, LLC, and not necessarily those of the named representative or named Broker dealer, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.

 

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[1] http://finance.fortune.cnn.com/2011/03/11/japans-fiscal-fix-deepens/

[2] http://online.wsj.com/article/SB10001424052748703597804576194130989423722.html?mod=WSJ_hp_LEFTWhatsNewsCollection

[3] http://online.wsj.com/article/SB10001424052748703597804576194452970557580.html?mod=googlenews_wsj

[4] http://www.cnbc.com/id/42045635

[5] http://online.wsj.com/article/SB10001424052748704296604576196140410967916.html?mod=WSJ_hp_MIDDLTopStories

[6] http://online.wsj.com/article/SB10001424052748703597804576194101663283550.html?mod=WSJ_hp_MIDDLTopStories

[7] http://online.wsj.com/article/SB10001424052748704296604576196140410967916.html?mod=WSJ_hp_MIDDLTopStories

[8] http://www.marketwatch.com/story/nfl-players-union-to-disband-court-case-follows-2011-03-11

[9] http://www.cnbc.com/id/42028477

[10] http://www.reuters.com/article/2011/03/11/us-usa-congress-spending-idUSTRE7205MS20110311

[11] http://www.msnbc.msn.com/id/41989924/ns/business-forbescom/

 

Pat Webb
Pat Webb - Phase 2 Advisors
8100 Turman Ct
Fort Collins, CO 80525
970-776-3306
patwebb@phase2adv.com
http://www.phase2adv.com