Pat Webb - Phase 2 Advisors
 
Economic News Boosts Stocks
Weekly Update - March 19, 2012
In This Issue
Performance
Headlines
Recipe
Golf Tip
Health Tip
Green Fact

Stocks closed flat on Friday, but all the major indices posted gains of more than 2% this week, their largest one-week advance this year. The week's gains were primarily driven by a string of positive U.S. economic reports and signs of life in the banking sector.

  

Following Tuesday's FOMC meeting, the Federal Reserve appears cautiously upbeat about the economy, though Fed Chairman Ben Bernanke acknowledged that the recovery will be a slow one and announced plans to keep the federal funds rate between 0.00% and 0.25% through at least 2014. The Fed has held interest rates near zero since December 2008 in an attempt to spur economic growth through access to cheap credit. [1] By continuing to keep rates low, the Fed is indicating that they are taking a wait-and-see approach to the economic recovery. [2] 

 

Friday's mixed trading came as traders absorbed economic reports on inflation, industrial production, and consumer sentiment. Inflation rose by 0.4%, pushed higher by rising gas prices. According to the report, consumer prices (a measure of inflation) were up 2.9% from this time last year, which is only slightly higher than the Fed's 2% target. Part of the Fed's job is to keep inflation from getting out of hand; if the inflation rate rises too high, it's possible that the Fed will raise interest rates to push it back down.

   

Industrial production remained disappointingly flat in February after December and January gains, and the University of Michigan Consumer Sentiment Index[3] dropped one percentage point from February's high of 75.3, as the year's high gas prices squeeze household budgets. Unfortunately, we can probably expect higher gas prices as we head into the summer travel season, which will continue to put pressure on the economic recovery. While gas prices don't appear to be affecting retail sales yet, it is possible that consumers will start curbing spending if gas edges much over $4. This year's high gas prices are largely due to fears about a confrontation with Iran, so continued saber rattling could send prices higher. Of all the factors in play right now, gas prices are definitely a wild card, and one we're keeping a close eye on.   

 

ECONOMIC CALENDAR:
Monday:
Housing Market Index

Tuesday: Housing Starts, Redbook
Wednesday:
Existing Home Sales, EIA Petroleum Status Report
Thursday: Jobless Claims, Leading Indicators
Friday:
New Home Sales




Performance


03-19-12 Chart

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. N/A means not available.

 

Headlines

Gas prices rose for the eighth straight day Saturday to a national average of $3.835, which is only 7% lower than the record high of $4.11 seen in July 2008. Gas prices are up 17% this year and are likely headed higher as we move into the summer driving months.[4]

 

Jobless claims dropped for the week ending March 10. First-time claims for unemployment benefits dropped to 351,000 from the previous week's revised 365,000 claims, suggesting slow improvements in the labor market.[5]

 

Foreclosures fell 8% in February as lenders began working through a backlog of seized properties. However, the recent $25 billion settlement with the five largest lenders means that foreclosures will likely increase in coming months as lenders begin repossessing homes again.[6]

 

The government said last week that manufacturers added 31,000 jobs in February. And factories have added 227,000 new jobs over the past year. The number of hours worked by factory employees also rose 0.9 percent last month, according to Capital Economics.[7]

 

Quote of the Week

"The human mind is our fundamental resource." - John F. Kennedy

Recipe of the Week

Halibut With Citrusy Tomatoes and Capers


03-19-12 Recipe

Fresh halibut and tangy capers dominate this tasty recipe. If you can't get halibut, this recipe is still delicious with any flaky white fish. Recipe from Real Simple.

Ingredients:

1 tablespoon plus 1 teaspoon olive oil

2 cloves garlic, sliced

1 pint grape tomatoes cut in half

1/2 cup fresh orange juice

1/2 cup fresh flat-leaf parsley

2 tablespoons capers

Kosher salt and black pepper to taste

4 6-ounce pieces skinless halibut fillet or some other firm-fleshed white fish

 

Preparation:

Heat 1 tablespoon of the oil in a large skillet over medium-high heat. Add the garlic and cook, stirring often, until fragrant, about 30 seconds.

Add the tomatoes, orange juice, parsley, capers, 1/2 teaspoon salt, and 1/4 teaspoon pepper and simmer until the tomatoes begin to break down, 4 to 5 minutes.

Meanwhile, heat the remaining teaspoon of oil in a large nonstick skillet over medium-high heat.

Season the fish with 1/4 teaspoon each salt and pepper. Cook until opaque throughout, 3 to 5 minutes per side. Serve with the tomatoes.

 



Golf Tip

The Perfect Swing

Do you feel like you're hitting too many slices and your swing is never quite right? It could be because you were taught to swing down the target line, which actually causes your arms to fly away from your body resulting in inconsistent contact. To correct this problem, the next time you are on the range, stop your arms at impact and allow your body rotation to bring the club back inside on your follow-through. Practicing this will help you master the proper club head path after impact.

Healthy Lifestyle

Get Juiced Up

Changing out your morning coffee or tea for citrus juice can have important health benefits. According to Purdue University researchers, just a small serving of citrus juice can help you absorb important cancer-fighting antioxidants. Typically, we can only absorb about 20% of the antioxidants in tea, but the antioxidants in citrus juice are better able to withstand digestion - upping the absorption to as much as 80%.

Green Living

Go for Green Computing

Save money (an average of $90 a year) and reduce greenhouse gases by shutting down your home computer every night. By shutting down when you don't expect to use it for a few hours or turning off the monitor between sessions, you are also reducing power usage. A laptop uses, on average, a quarter of the power required by a desktop computer. Laptops are found in a variety of price ranges and are more than adequate for most computer tasks.


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[1] http://money.cnn.com/2012/03/13/news/economy/federal_reserve_rate/index.htm?iid=EL 

[2] http://finance.yahoo.com/marketupdate/update 

[3] http://www.bloomberg.com/news/2012-03-16/consumer-sentiment-in-u-s-unexpectedly-decreased-in-march.html 

[4] http://money.cnn.com/2012/03/17/news/economy/gas-prices-aaa/index.htm?iid=H_E_News 

[5] http://money.cnn.com/2012/03/15/news/economy/unemployment-benefits/index.htm?iid=H_E_News 

[6] http://www.businessweek.com/news/2012-03-15/foreclosures-fall-8-percent-in-u-dot-s-dot-with-seizure-increase-coming 

 

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