Pat Webb - Phase 2 Advisors
Weekly Market Update
Week of June 20, 2011
The Markets:

Though our economic growth is being challenged by some strong headwinds, including high food prices, high gas prices, and a soft housing market, good news came at the right time last week. The Conference Board reported on Friday that its index of leading economic indicators grew by 0.8% in May.[1] This represents the largest increase since February and is a strong improvement over the initial forecast. Some of the things that helped lift the index were:

  • Federal Reserve policies designed to help financial markets.
  • An increase in building permits, which signal future construction.
  • A boost in consumer confidence as gas prices fell.
  • Fewer people applying for unemployment benefits.[2] 

This report reaffirms what many economists have already been saying - while we are clearly facing some obstacles, the overall picture is improving. According to Moody's analytics, economists are anticipating second-quarter growth between 2% and 2.5%. "Consumers are not panicking. We should begin to emerge from the soft patch in the second half of the year; a lot of the drags on the recovery are fading," said Ryan Sweet, a senior economist there.[3]

In related news, the Dow rose for the first time since April and the S&P 500 broke a six-week losing streak by climbing 0.3%. In addition, suppliers are finally able to predict full rebounds from the March Japanese earthquake, with Honda projecting a return to normal production in August[4]  and Toyota following suit in September.[5] While the economic recovery will likely continue to ebb and flow, these are some of the signs that we are still headed in the right direction.

ECONOMIC CALENDAR:                                                  
Tuesday - Existing Home Sales                             
Wednesday - EIA Petroleum Status Report, FOMC Meeting
Thursday - Jobless Claims, New Home Sales                                             
Friday - Durable Goods Orders, GDP       




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.


The Senate voted Thursday to cut the $5 billion-a-year subsidy given to oil refiners for blending ethanol into gasoline. Provided in the form of tax credits, the subsidy gives 45 cents a gallon to refiners who use ethanol, a renewable fuel additive that comes mainly from corn in the U.S..[6]  

Ownership of the Los Angeles Dodgers baseball team will be determined by a one-day divorce trial. The outcome will decide whether Frank McCourt is the sole owner, or if the team should be considered community property, which could likely lead to a sale of the team.[7]

Microsoft won antitrust approval to complete the purchase of Skype, an internet phone service. Its largest acquisition to date, the company will buy Skype for $8.5 billion.[8]  

In the United States, 176 million people watched online videos last month, much of it on YouTube, according to the latest survey by comScore. Each person watched 15.9 hours on average.[9]


Quote of the Week
"In the depth of winter, I finally learned that within me there lay an invincible summer."
- Albert Camus
Recipe of the Week

Red, White, and Blue Parfaits


From: Better Homes and Gardens
This sweet tart mousse takes only 20 minutes to make and provides a light, airy dessert option.

Servings: 6 servings
Total: 15 minutes

1 8-ounce carton vanilla low-fat yogurt
1 /4 teaspoon almond extract or 1/ 2 teaspoon vanilla
1 /2 of an 8 ounce container frozen light whipped dessert topping, thawed
3 cups fresh raspberries and/or cut-up fresh strawberries
3 cups fresh blueberries

1. In a large bowl, stir together yogurt and almond extract or vanilla. Fold in whipped topping.

2. To serve, in six 12-ounce glasses or dessert dishes, alternate layers of the berries with layers of the yogurt mixture.
Golf Tip of the Week

Defective Putter?

If your putts are always crooked and you can't figure out why, it may not be your fault. Even with expensive putters, it has become relatively common for grips to be assembled improperly. If you haven't already, it is a good idea to check the grip on your putter to ensure it is not crooked. If you don't own a vice, you may need a friend to help you out. Here's how to perform the check:

Wrap a rag around the shaft of your putter and clamp it horizontally in a vice (gently, just enough to hold it). Make sure the putting face is turned upward so you can place a level on it. Once you level the putting face, place the level across the flat of the putter grip. If the bubble is not centered, your grip is crooked. Even a couple degrees will severely affect your putts, and it gets worse when the putt is long.

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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.


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Pat Webb
Pat Webb - Phase 2 Advisors
8100 Turman Ct
Fort Collins, CO 80525