Pat Webb - Phase 2 Advisors
Weekly Market Update

Special Edition - 2Q 2011 Quarter Review

The Markets:

Amidst the ups and downs of the past few weeks, our move into a new quarter was barely noticed by national media. Let's take a brief look back at the second quarter.

April - The quarter opened with government budget deadlines looming and Congress passing a last-minute spending bill that cut $2 billion, allowing agencies to spend money through April 15. By that time, lawmakers expected to determine a budget for the remaining six months of the fiscal year.[1]  The initial uncertainty did not sit well with investors, but signs that consumer confidence was rising, job numbers were increasing, unemployment was at a two-year low,[2] and industrial production was growing, helped optimism win out.[3]  The month ended with a strong earnings season coupled with increases in personal spending, personal income, and gradual improvement in the nation's job picture. All in all, the Dow finished 4.3% higher for the month[4] and the S&P 500 hit a three-year high.[5]

May - The month began riding high on a wave of positive news, reinforced by a drop in oil prices,[6] but attention was quickly drawn to the Euro zone situation as Greece's credit rating continued to fall.[7]  U.S. investors closely monitored the situation even as volatility crept back into the markets based on less positive economic reports.[8]  Unfortunately the month's numbers continued to tick downward on a slowed recovery.  

June - Economic reports on the slowdown in jobs and hiring, housing, and consumer spending all contributed to negative media which fed investor fears. But even as economists trimmed their forecast for 2011 GDP growth to 2.7%, they still predicted stronger growth for the second half of the year.[9]  Positive growth in manufacturing,[10] particularly suppliers' rebound from Japan's March earthquake, led the markets to their best weekly performance since July 2009 last week, ending the quarter with fireworks.[11] 

The past three months have been a prime example of the cyclical nature of investing. Undoubtedly, the markets change quickly, but their predictability should not be judged by a deluge of pessimistic (or overly optimistic) media reports. Prudent investors strive to maintain a balanced perspective and ignore fanatical fear-mongering while staying the course to better days.

ECONOMIC CALENDAR:                                        
Monday - US Holiday: Independence Day                                         
Tuesday - Factory Orders                                 
Wednesday -ADP Employment Report, ISM Non-Mfg Index
Thursday - BOE Announcement, ECB Announcement, Jobless Claims, EIA Petroleum Status Report                                                             
Friday - Employment Situation



07/05/11 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.


June marked the end of the Federal Reserve's second round of quantitative easing, also known as QE2, in which it purchased $600 billion worth of treasury bonds to keep interest rates low and help spur lending and economic growth.[12]

On Thursday, the Greek parliament passed a controversial five-year austerity program in an attempt to prevent financial default. The legislation will implement €28 billion Euros ($40.6 billion) in tax hikes, spending cuts and other measures. The vote also allows the release of a delayed €12 billion in aid and renews discussions about a second bailout.[13] 

Social gaming company, Zynga Inc., filed for an initial public offering Friday hopes to raise as much as $1 billion from investors. Zynga, which created Facebook games such as "FarmVille" and "CityVille," reported a net profit of $90.6 million for the year and has over 236 million monthly users.[14]

Fast food restaurants like Burger King, Sonic and coffee company, Starbucks, are experimenting with adding alcohol to their standard menu offerings. Burger King recently opened "Whopper Bars" in six U.S. cities, which sell beer for about $4.25 a bottle. Starbucks has begun selling beer for about $5 a bottle and wine for up to $9 a glass in some Seattle stores in an effort to boost sales.[15]


Quote of the Week
"Nearly all men can stand adversity, but if you want to test a man's character, give him power."
 - Abraham Lincoln
Recipe of the Week

Lemon-Meringue Beehives

07/05/11 recipe

From: Better Homes and Gardens

Servings: 8 servings
Total: 1 hr. and 5 mins

2 egg whites                                                 
1 teaspoon lemon juice                                        
1/ 4 teaspoon cream of tartar                                    
2/ 3 cup of sugar                                                                      
1/2 cup purchased lemon curd                                    
1 cup fresh loganberries, black berries, or other berries

1. Let egg whites stand at room temperature in a large mixing bowl for 30 minutes. Meanwhile, line baking sheet with parchment paper or foil. Using a pencil, draw eight 2-1/4-inch circles and eight 1-3/4-inch circles about 1 inch apart on the paper.* Turn paper pencil-side down on baking sheet; set aside. Preheat oven to 300 degree F.

2. Add lemon juice and cream of tartar to egg whites. Beat with mixer on medium speed until soft peaks form (tips curl). Add sugar, 1 tablespoon at a time, beating on high speed about 7 minutes or until very stiff peaks form (tips stand straight) and sugar is almost dissolved.

3. Using a pastry bag fitted with a medium (1/4-inch) round tip, pipe a flat base of meringue onto all of the circles on the paper. Pipe a ring of meringue onto edges of each of the 8 larger meringue rounds, building the sides 3/4 inch tall by piping a continuous coil of meringue to form a small shell. For tops, pipe a coil of meringue on smaller rounds to make a cone shape that resembles the top of a beehive.

4. Bake in a 300 degree f oven for 30 minutes. Turn off oven. Let meringues dry in oven, with door closed, at least 1 hour. Remove dry meringues from paper. Place in an airtight container. Store in a cool, dry place for up to 1 week.

5. Just before serving, spoon 1 tablespoon of lemon curd into each bottom meringue shell. Place a few berries on lemon curd. Prop top of meringue beehive next to bottom. Makes 8 servings.

Golf Tip of the Week

Less Spin Equals More Distance

The next time you clean your clubs, skip the driver. Let those grooves get a little bit clogged up. The fewer grooves there are the less spin is induced on the ball, thus causing it to fly farther. Sometimes the simplest things can make a difference.

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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.


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