Pat Webb - Phase 2 Advisors
 
Weekly Market Update
Week of May 30, 2011
The Markets:

Have you ever been through a period of recovery in your life? Perhaps you received an injury of some sort and needed time to heal. While recovering, we don't usually function at our peak level do we? We might experience a measure of discomfort or decreased mobility for a time. We may have good days and bad days. This aptly illustrates what our economy is going through.

From late 2007 to mid 2009, we sustained a serious injury. Since that time official data shows that we are recovering, but it doesn't always feel like we are. Disruptions from the Japanese earthquake and tsunami have had a direct impact on manufacturing and the auto industry in particular. The spike in oil and gasoline prices has affected consumer and business spending. More recently, European sovereign debt woes and a batch of soft economic reports have created tension for stock markets. What does this all mean? It means we are not functioning at our peak level because we're going through a period of healing. Until we are fully recovered, we are going to experience ups and downs.

 

We've come far, relatively fast - especially in the stock market. With the Dow up some 22% in the last 12 months[1], we must reasonably acknowledge that such rapid growth is not sustainable. We may have to go lower before we go higher. Since the markets began to rise in March 2009, we have seen a number of 5-7 % pullbacks[2] and we may see more of them in the future.


To use another analogy, if you're on a bumpy plane ride, you don't strap on a parachute and jump out the door at the first sign of turbulence; you simply buckle your seatbelt and try to relax. That is precisely what we are encouraging you to do. In our opinion, now is not the time to give up on our expectations for a full recovery.

ECONOMIC CALENDAR:   
Monday: US Holiday - Memorial Day
Tuesday: Chicago PMI, Consumer Confidence, S&P Case-Shiller Home Price Index
Wednesday: Motor Vehicle Sales, ADP Employment Report, ISM Manufacturing Index, Construction Spending
Thursday: Monster Employment Index, Jobless Claims, Productivity and Costs, Factory Orders
Friday: Employment Situation, ISM Non-Manufacturing Index


Performance


05_30_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:

Gas prices have come down in May after reaching nearly $4 last month, giving a lift to how people feel about the economy and raising hopes that they might be willing to spend more. Benchmark oil for July delivery was down 70 cents to $99.89 a barrel in electronic trading on the New York Mercantile Exchange on Friday.[3]

 

The European Union is working on a second bailout package for Greece in a race to release vital loans next month and avert the risk of the euro zone country defaulting, EU officials said on Monday.[4]

 

China will raise retail electricity prices starting next month, the first increase in more than a year, to curb demand and boost power generation as the nation battles with a supply shortfall that may be the worst in history.[5]

 

A woman's attempt to sell a purported $1.7 million moon rock was thwarted last week when the buyer she met with turned out to be an undercover agent working for NASA. The sting, which according to the Riverside County (Calif.) Sheriff's Dept. came after several months of investigation, took place at a Denny's restaurant in Lake Elsinore, Calif., about 70 miles southeast of Los Angeles. The woman, who authorities did not identify, was detained but not arrested pending the "moon rock" being verified as being of lunar origin.[6]



Quote of the Week
"To fly we have to have resistance."  -- Maya Lin
Recipe of the Week

Focaccia-Camembert Pizza


05_30_2011_recipe

From: Better Homes and Gardens
This quick and easy pizza recipe features the perfect combination of cheese, nuts, and vegetables. Better yet, it will be on your table in 30 minutes or less.

Total time: 20 mins

Ingredients:
4 6-inch Italian flatbreads (focaccia)
2 large tomatoes, sliced
Salt and ground black pepper
1 8-oz. round Camembert cheese, chilled
1/3 cup chopped walnuts
2 Tbsp. snipped fresh chives

Directions:
1. Heat broiler. Place flatbreads on the unheated rack of a broiler pan. Top with tomato slices; sprinkle with salt and pepper. Cut cheese in thin slices. Place cheese slices on tomato slices.

2. Broil 4 to 5 inches from heat about 2 minutes or until cheese begins to melt. Sprinkle with walnuts; broil 1 minute more. Sprinkle with fresh chives. Serves 4.

Golf Tip of the Week

Push & Tap, Not Swing, When Putting


The best putters are able to roll the ball smoothly so that it skids very little on its way to the hole. Key to this is keeping the putter head low to the ground throughout the stroke. Rather than picking the putter up in the back swing and then making a descending hit on the ball, focus more on keeping the club head low while pushing the ball gently. A descending hit will actually put backspin on the ball and cause it to jump and skid off the putter face.

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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://www.google.com/finance?q=INDEXDJX:.DJI

[2] http://www.cnbc.com/id/43152790

[3] http://www.google.com/hostednews/ap/article/ALeqM5iOfbpxuwPYJCUVIXJwgICceAM05Q?docId=7f22d6d4dcfb44118b996eccc3b12597

[4] http://www.reuters.com/article/2011/05/30/us-eurozone-idUSTRE74Q1YV20110530

[5] http://www.bloomberg.com/news/2011-05-30/china-raises-industrial-power-prices-in-15-provinces-to-help-ease-shortage.html

[6] http://www.cbsnews.com/stories/2011/05/27/scitech/main20066784.shtml

 

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