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Weekly Market Update
Week of April 4, 2011

Special Edition - 1Q 2011 Quarter Review

The Markets:

The first quarter of 2011 has been one for the history books. Political turmoil in Northern Africa and the Middle East, as well as multiple catastrophes in Japan rattled many investors, but wasn't enough to halt the running of the bulls. Despite noteworthy volatility, the Dow rose 6.9% to its best first quarter in 12 years, rebounding 6% from lows hit in mid-March.[1]


January - The year started hesitantly as Americans considered the impact of political transition, both through QE2 measures and the new Republican majority. At the end of the month, political strife in Egypt was affecting world markets. Protests started there on January 25th when thousands of people took to the streets to protest poverty, rampant unemployment, government corruption and the autocratic governance of President Hosni Mubarak.[2]  The price of oil rose with fears about the stability of maritime operations on the Suez Canal. As a major trade route, any interruption or closure has the potential to create a spike in oil and energy prices.[3]  Still, on the 31st, the Dow posted its highest close since October 2, 2008.[4]


February - By Valentine's Day, U.S. stocks climbed to fresh 2 1/2-year closing highs after the resignation of Mubarak removed a layer of uncertainty from global markets.[5]  Mubarak's resignation dramatically reduced geopolitical risk and uncertainty from the region,[6] and crude oil prices dropped to $85.16 a barrel.[7]  But the calm would last only a short while before similar issues in Libya made headlines. Although Libya supplies just under 2% of the world's oil supply, oil fears still caused the stock market to suffer its first weekly loss in a month. And while U.S. drivers were already feeling the pinch at the pump, gas prices took their biggest one-day jump in two years[8] adding to concerns about the stability of the economic recovery. 


March - On March 11, 2011 an 8.9 earthquake rocked Japan and generated a 30-foot-high tsunami that devastated the country's northeastern coast. On the heels of this devastating news were reports of several damaged nuclear reactors. Almost immediately, Japan's recession-burdened stock markets dropped.[9]  Many of the nation's industries, including automotive factories and electronics, were forced to halt operations. Simultaneously, the U.S. participated in establishing a no-fly zone over Libya - a situation that remains unstable. And in the Euro zone, debt woes flared up again as Portugal's government collapsed and questions about Spain's solvency persisted. Thankfully, the economic impact of Europe's debt woes have remained relatively contained to date.[10]  Finishing the quarter, the markets struggled to regain their footing after two negative weeks, but by the end of March had managed to recoup losses on positive news regarding 2010's fourth quarter, increased consumer spending, and higher GDP.


Despite upheaval in the Middle East, Eurozone changes, and an ongoing crisis in Japan, investors appear determined to maintain their confidence. Sending a signal that bodes well for the second quarter, the Dow rose 0.5% on Friday, reaching its highest intraday level since June 6, 2008.[11]  Although such positive news should be enjoyed, it is not to say more uncertainty and market volatility won't arise. Many of the issues introduced in March still linger and remain developing stories.  As always though, we are here to help you assess the risks and rewards of investing, to educate you, and to keep you informed. We hope you have a great week!


ECONOMIC CALENDAR:                                                
Tuesday - ISM Non-Mfg Index, FOMC Minutes                     
Wednesday - EIA Petroleum Status Report
Thursday -BOE Announcement, ECB Announcement, Jobless Claims

 

Performance


04_04_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.

Quote of the Week
"Victory belongs to the most persevering."- Napoleon Bonaparte
Recipe of the Week

Spring Citrus Salad


04_04_2011_recipe

From: The Food Channel
A beautiful salad of radicchio and butter lettuce in two contrasting colors of spring: green and deep purple. Topped with paper-thin fresh fennel bulb and plump orange segments, tossed with homemade raspberry-citrus vinaigrette.


Servings: 12 servings
Prep: 30 mins

Ingredients:
3 navel oranges
1 fennel bulb, top fringe removed
2 heads butter lettuce
1 head radicchio
1 shallot, minced
2 tablespoons raspberry white balsamic vinegar
1 tablespoon white wine vinegar
cup fresh orange juice
teaspoon kosher salt
teaspoon black pepper
cup olive oil

Directions:
1. To segment oranges, cut off the stem and blossom ends and cut away the peel, following the curve of the fruit. Cut out each segment, by gently sliding your knife between the membrane walls toward center of fruit. Squeeze leftover membranes and reserve juice for vinaigrette.

2. Using a mandolin, carefully slice fennel bulb, paper-thin, horizontally.

3. Remove core from lettuces and tear into large bite-sized pieces.

4. For citrus vinaigrette, combine shallot, vinegars, orange juice, salt and pepper; whisk to combine. Slowly add olive oil, while whisking, until well incorporated. In a large salad bowl, toss together lettuces, fennel, orange segments, and the vinaigrette.

5. Serve immediately.

Golf Tip of the Week

Memorize Your Ball Position



Memorize your ball position for each club, or more correctly, the progression of ball positions as you go from club to club. Then, before every shot, check your distance out from the ball and the ball's position in your stance. Don't rely on "feel" as so many golfers do. If you use your standard swing and the ball is just 1/2 inch farther forward than usual, you will not hit consistently.

Some players have three or four basic positions - driver, long clubs, mid irons, short irons. Others have a gradual system that goes from off the left toe for drivers, all the way back to the right toe for short wedges. Whatever system you choose, stick with it to increase your consistency.

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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://online.wsj.com/article/SB10001424052748703712504576234843100380506.html

[2]  http://www.huffingtonpost.com/2011/01/28/whats-going-on-in-egypt_n_815734.html

[3]  www.marketwatch.com/story/us-stocks-fall-on-fears-over-egypt-djia-biggest-drop-in-2-months-2011-01-28?dist=afterbell

[4]  http://money.cnn.com/2011/01/31/markets/markets_newyork/index.htm

[5]  http://www.bloomberg.com/news/2011-02-12/dollar-advances-as-egypt-european-debt-stoke-demand-for-safety.html

[6]  http://money.cnn.com/2011/02/11/markets/markets_newyork/index.htm

[7]  http://money.cnn.com/2011/02/11/markets/food_prices_commodities/index.htm

[8]  http://money.cnn.com/2011/02/26/news/economy/gas_prices/index.htm

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

[10] http://online.wsj.com/article/SB10001424052748703712504576234843100380506.html

[11] http://www.marketwatch.com/story/us-stocks-begin-april-on-an-upbeat-note-2011-04-01

 

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