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Weekly Market Update
Week of April 11, 2011
The Markets:

Fears of a government shutdown loomed large last Friday night. With less than an hour to spare, Congress pushed through a last-minute spending bill - the seventh in the past six months - which cut $2 billion and allows agencies to spend money through April 15. By that time, lawmakers expect to determine a budget for the remaining six months of the fiscal year.[1]  It is interesting to note how awareness of the potential shutdown affected investors.

 

As a result of the budget impasse, a sharply weaker dollar led investors into oil and commodities, while U.S. stocks fell.[2]  As we've mentioned before, equity markets don't like uncertainty, and the exodus we saw on Friday is a classic example of this fact. At a time when concerns regarding the Middle East situation has sent oil prices surging, and the Japanese disaster has impacted supply chains,[3] reaching a deal was extremely important. The last-minute agreement keeps 800,000 government workers on the job and a variety of services, from passport issuing to tax collecting, up and running. It also allows the military to continue receiving their paychecks.[4]

 

"Both sides had to make tough decisions and give ground on issues that were important to them," President Obama said. "But beginning to live within our means is the only way to protect those investments that will help America compete for new jobs." Despite budget concerns, consumer confidence rose for a second consecutive week as an improving job market helped ease the burden of higher fuel costs.[5]


As in the past, both international and domestic politics will continue to play a part in peoples investing decisions. The week ahead will likely be no exception as the new budget is voted on. Also next week, a series of labor reports are released and earnings season begins. We'll let you know how things turn out in our commentary next week.

ECONOMIC CALENDAR:                                                
Tuesday - International Trade, Import and Export Prices, Bank of Canada Announcement, Treasury Budget                             
Wednesday - Retail Sales, Business Inventories, EIA Petroleum Status Report, Beige Book
Thursday - Producer Price Index, Jobless Claims                                             
Friday - Consumer Price Index, Empire State Mfg, Treasury International Capital, Industrial Production, Consumer Sentiment

 

Performance


04_11_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.

Headlines:

Crude oil advanced 2.3% Friday, settling at $112 a barrel - its highest price in more than 30 months.[6]  In addition to sparking fears about a slowdown in the global economy, investors are also concerned about Libya's civil war and the country's 80% drop in production.[7]

 

On April 6 Portugal asked for international assistance, joining Greece and Ireland in receiving bailouts from the European Union and the International Monetary Fund. The country faces around €4.3 billion ($6.2 billion) of bond redemptions in April, followed by a repayment of €4.9 billion in June.[8]

 

The quarterly earnings season begins next week.  Gas and commodity prices have surged this year, and could spell trouble for the rebound in consumer spending and sales growth. Overall, earnings for the companies in the S&P 500 are expected to be up 11.5% over last year. Revenues are expected to rise 8%, remaining unchanged from the fourth quarter.[9]


 


Quote of the Week
"Patience and fortitude conquer all things." - Ralph Waldo Emerson
Recipe of the Week

Strawberry Bruschetta


04_11_2011_recipe

From: Better Homes and Gardens
Serve this as an appetizer or dessert when strawberries are in season.

Servings: 24 servings
Total: 25 mins

Ingredients:
1 8-ounce loaf baguette-style French bread
1 8-ounce tub cream cheese
1 tablespoon honey
2 cups strawberries, sliced
cup strawberry jelly

Directions:
1. Heat oven to 375 degree F. Cut bread into 24 slices about 1/4-inch thick. Place in a single layer on an ungreased cookie sheet. Bake about 10 minutes or until lightly brown, turning once.

2. Stir together cream cheese and honey; spread on one side of each bread slice. Arrange strawberry slices on the cheese. Heat jelly in a custard cup in a microwave oven on high power for 30 seconds; stir (or heat and stir in a small saucepan until melted). Brush jelly over strawberries. Makes 24 servings.

Make-Ahead Tip:
Toast the bread and store in a covered container at room temperature up to 2 days or freeze up to 1 month. Stir together the cream cheese and honey; cover and refrigerate up to 2 days.

Golf Tip of the Week
Can You Wiggle Your Toes?

With the proper setup, your weight should be distributed evenly on your feet. Many golfers have a tendency to stretch out towards the ball too much. This causes their weight to be too far forward. How can you tell if your weight distribution is proper? Easy! Just make sure you can wiggle your toes freely.

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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://money.cnn.com/2011/04/08/news/economy/budget_deal/index.htm

[2] http://money.cnn.com/2011/04/08/markets/markets_newyork/index.htm

[3] http://www.marketwatch.com/story/government-shutdown-looms-at-midnight-2011-04-08

[4] http://www.marketwatch.com/story/government-shutdown-looms-at-midnight-2011-04-08

[5] http://www.bloomberg.com/news/2011-04-09/obama-says-goverment-will-be-open-for-business-after-deal.html

[6] http://www.marketwatch.com/story/crude-oil-rallies-to-almost-112-a-barrel-2011-04-08

[7] http://www.cnbc.com/id/42483704

[8] http://www.marketwatch.com/story/portugal-pays-nearly-6-to-borrow-12-months-2011-04-06

[9] http://money.cnn.com/2011/04/09/markets/first_quarter_corporate_earnings/index.htm

 

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