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Weekly Market Update
Week of July 25, 2011
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The Markets:
With less than two weeks until the August 2 deadline for raising the debt ceiling, investor focus has been glued to the debate. Lawmakers have been negotiating ways to cut spending and raise the nation's borrowing limit for months, but there is still no articulated path forward. Treasury Secretary Timothy Geithner said Sunday on CNN's State of the Union, "We're almost out of runway. We're not nowhere, but we're almost out of runway." In the days ahead, markets around the world will be looking for reassurance that the U.S. political system can compromise on solutions for the greater good.
Helping to balance uncertainty in Washington, last week was one of surprisingly positive earnings reports that lifted major indexes to weekly gains. The Dow rose more than 1% and the S&P 500 and Nasdaq more than 2%. Analysts also cited relative progress on both the U.S. debt ceiling issue and the ongoing European debt crisis as partial reasons for the positive results.[1]
This week promises to be a busy one both for stocks and economic reports.180 companies in the S&P 500 are scheduled to report quarterly financial results; the August 2 deadline for raising the debt ceiling is rapidly approaching; and Friday will bring the first official report on second-quarter economic growth.[2]
With everything featured in the headlines right now, we understand that you may have some concerns about how your investments could be affected. Please rest assured that we are closely monitoring all relevant activity and will keep you informed about any steps that need to be taken. At the same time, we would like to reiterate that we do not believe now is the time for drastic action. If you have questions or would like additional information, please feel free to contact us. We are always here to lend a hand.
ECONOMIC CALENDAR:
Tuesday - S&P Case-Shiller HPI, Consumer Confidence, New Home Sales
Wednesday -Durable Goods Orders EIA Petroleum Status Report, Beige Book
Thursday - Jobless Claims, Pending Home Sales Index
Friday - Employment Cost Index, GDP, Chicago PMI, Consumer Sentiment
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Performance
 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. |
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Headlines:
The dollar fell as U.S. lawmakers failed to agree on raising the nation's $14.3 trillion debt ceiling. America's currency weakened against the Swiss franc, yen and euro.[3]
Investors outside the U.S. own $4.51 trillion in U.S. Treasuries, or about 50% of the marketable government debt outstanding, according to the Treasury Department.[4]
Last week marked the first anniversary of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Dodd-Frank's crucial innovation was to identify sources of systemic risk in the banking system, and to provide regulatory tools to lessen the problem. A year after the bill became law, it still has many critics and champions.[5]
Two coordinated terror attacks in Norway have left at least 92 dead. Flags are flying at half-staff and the Army is patrolling the streets in a city that just endured its worst peacetime attack in history. Our thoughts are with them.[6]
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"Cheerfulness is the best promoter of health and is as friendly to the mind as to the body. "
- Joseph Addison
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Stuffed Cherry Tomatoes  From: Better Homes and GardensThese bite-size appetizers bring festive summer colors to your table.
30 cherry tomatoes (1-inch diameter)
1 cup firmly packed fresh basil leaves
1/2 cup firmly packed fresh flat-leaf parsley leaves
1/4 cup pine nuts, toasted
1 large clove garlic, quartered
1/8 teaspoon black pepper
2 tablespoons olive oil
4 ounces goat cheese, crumbled (1 cup)
Fresh basil leaves (optional)
Directions:
1) Slice off the very top of each tomato. Cut a thin slice off the bottom of each tomato so they stand level. Scoop out tomatoes from the top using a very small, narrow spoon. Turn upside down on paper towels to drain.
2) For pesto, in a blender container or food processor bowl combine 1 cup basil, the parsley, nuts, garlic, and pepper. Cover and blend or process with several on/off turns until a paste forms, stopping machine several times and scraping the sides. With the machine running slowly, gradually add oil and blend or process to the consistency of soft butter. Transfer to a small bowl and stir in the goat cheese.
3) Spoon pesto mixture into a small self-sealing plastic bag. Snip a very small hole in one corner of the bag. Seal bag. Squeeze pesto into the tomato shells. Place filled tomatoes on a serving plate. If desired, garnish with small basil leaves. Makes 30 tomatoes.
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The best time to practice is right after you've played, while your body is still warm and the problems you experienced are fresh in your mind.
Even if you only want to go to the range for a workout, it's a good idea to break down your typical round of golf to see which shots you need to practice the most instead of hitting over and over again with your favorite club. For example, in a regulation round of golf, a scratch player would hit approximately fourteen drives, four fairway woods, four long irons (2, 3, 4), eight medium irons (5, 6, 7), six short irons (8, 9, PW), four chip shots, two bunker shots, and 30 putts for 72.
Based on these numbers, he or she should spend almost half their practice time on the putting green, about a fourth of the time hitting tee shots, and the rest of the time divided among all the others.
Break down your own rounds in a similar way, and you'll know how to practice effectively.
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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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[1] http://money.cnn.com/2011/07/24/markets/stocks_lookahead/index.htm?iid=HP_LN
[2] http://www.marketwatch.com/story/investor-hopes-hinge-on-debt-plan-earnings-2011-07-24
[3] http://www.businessweek.com/news/2011-07-25/franc-yen-gain-as-u-s-debt-impasse-spurs-bids-euro-declines.html
[4] http://www.businessweek.com/news/2011-07-25/franc-yen-gain-as-u-s-debt-impasse-spurs-bids-euro-declines.html
[5] http://www.ft.com/intl/cms/s/0/7412416c-b610-11e0-8bed-00144feabdc0.html#axzz1T4G9AWIc
[6] http://www.bloomberg.com/news/2011-07-24/norway-killing-suspect-may-explain-motives.html
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