Looking to the Leaders

Weekly Update - June 18, 2012

In This Issue

Performance

Headlines

Recipe

Golf Tip

Health Tip

Green Fact

The Markets:

Highlighting just how fickle equity markets can be, key indices managed to notch gains last week in spite of precarious conditions in Europe ahead of Greek elections and disappointing economic data. For the week, the S&P advanced 1.3%, the Dow 1.7%, and the Nasdaq 0.5%.

The week started on a sour note as investors faced Spain's request for $125B to shore up its banks, followed by a raft of mostly disappointing economic data: unemployment claims were up, retail sales were down, and inflation rose in May. Investors shrugged off the lackluster data and markets rose on hopes that the Fed will agree to additional quantitative easing when it meets next week - though this assumption is premature.[1] Fed Chairman Bernanke's comments in a speech last week divided the talking heads right down the middle. While there are some who believe the Fed will take action due to the disappointing economic data we've been seeing, there are others who believe the bad data isn't sufficient to force the Fed's hand.[2]

At the moment, it appears that the Fed is concerned both by the risk of diminishing returns on its quantitative easing, and the potential moral hazard created by relieving Congress of its fiscal responsibilities by taking further monetary action. Whatever action (or inaction) the Fed decides to take will be closely followed by investors worldwide.

The world held its breath over the weekend, waiting to see the results of Sunday's Greek national elections, which could largely determine the direction the European crisis will go next. Late Sunday polls showed the pro-bailout New Democracy taking a slim majority over anti-bailout leftists SYRIZA. Because of a 50-seat bonus given to the winning party, the result gives New Democracy (and their pro-bailout coalition partners) a projected 159 seats in the 300-seat parliament.[3]

With the pro-bailout parties in the driver's seat, European policymakers have bought themselves time to raise more money for bailout funds and move ahead with plans to set up a centralized European regulator and deposit insurance to protect savers. Signaling its relief and anxiousness to work with the new Greek state, the German government indicated a willingness to loosen Greece's austerity requirements, as long as the Greeks stand by their obligations under the bailout agreement.[4]

Despite the Greek vote, challenging days are still ahead for Europe. The region's leaders face difficult decisions on how to uphold their credibility, display financial discipline, and avoid stoking contagion. They also need to make convincing progress towards a comprehensive plan for lasting change.

ECONOMIC CALENDAR:

Monday: Housing Market Index

Tuesday: Housing Starts

Wednesday: EIA Petroleum Status Report, FOMC Meeting Announcement, FOMC Forecasts, Chairman Press Conference

Thursday: Consumer Price Index, Jobless Claims

Friday: Jobless Claims, Existing Home Sales, Philadelphia Fed Survey

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. N/A means not available.

Headlines:

Unemployment rises in May. Although 27 states added jobs last month, 18 states reported rising unemployment rates in May, the most in nine months, indicating that the job market remains weak.[5]

Consumer prices dropped 0.3% last month, pushed lower by falling gasoline prices. Excluding volatile food and energy goods, the core inflation rate rose 0.2%, surprising economists who expected a 0.2% drop.[6]

U.S. factory output dropped 0.4% in May. Domestic factories experienced a drop in production, driven by a drop in automaker output. The production of computers, appliances, and aircraft declined, indicating that manufacturing is slowing.[7]

Oil prices down 20% since March, but price gap creates disparities. Pipeline capacity issues created a gap in prices between domestic light sweet crude (trading at $84/barrel), and international Brent crude (trading at $97). Hopefully, new pipeline projects will decrease the supply issues and stabilize the price across the country.[8]

"Most folks are as happy as they make up their minds to be."
- Abraham Lincoln

Tomato, Cucumber, and Sweet Onion Salad with Cumin Salt

This tasty salad is inspired by Middle Eastern cuisine. A sprinkling of toasted cumin seeds ground with salt offers a warm depth of flavor. Any leftover cumin salt is terrific on grilled chicken or roasted potatoes. From recipe.com

Ingredients:

1 tablespoon cumin seeds

1 1/2 tablespoons coarse sea salt

2 1/4 pounds tomatoes, cored and sliced 1/4 inch thick

1 pound cucumbers, peeled and sliced 1/8 inch thick

1 large sweet onion, thinly sliced

1/4 cup extra-virgin olive oil

3 tablespoons fresh lemon juice

Directions:

1) In a skillet, toast the cumin seeds over moderately high heat until fragrant, 30 seconds; transfer to a mortar and let cool. Add the salt and grind to a coarse powder.

2) In a large bowl, toss the tomatoes, cucumbers, onion, oil, and lemon juice. Sprinkle 2 teaspoons of the cumin salt over the salad and toss. Serve the salad on a platter.

Lose 5 Strokes in 2 Weeks

If you want to knock some strokes off your score fast, focus on your short game. About half of your shots are struck from within 60 yards of the flag stick. And yet, most average golfers spend all their time practicing with the driver.

If you want to see a radical improvement in your game within a week or two, you must make a radical change in the way you practice. For two weeks, devote 90 percent of your practice time to chipping and putting, and only 10 percent to the full swing.

That's right - If you want to knock off five strokes, put down the driver, leave your long clubs in the bag, and head for the practice green.

Take Care of Your Pearly Whites

Dental health has been linked, among other things, to premature heart disease. In between regular visits to the dentist, there are simple steps that each of us can take to greatly decrease the risk of developing tooth decay, gum disease, and other dental problems. These include:

* Brushing thoroughly twice a day and flossing daily

* Eating a balanced diet and limiting snacks between meals

* Using dental products that contain fluoride, including toothpaste

* Rinsing with mouthwash

Responsible Disposal

Any electronic waste that can't be refurbished should be disposed of properly. Everything from monitors to scanners to batteries can be given to e-waste disposal and recycling services for little to no cost.

Share the Wealth of Knowledge!

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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.

Diversification does not guarantee profit nor is it guaranteed to protect assets

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.

The Housing Market Index (HMI) is a weighted average of separate diffusion indices based on a monthly survey of NAHB members designed to take the pulse of the single-family housing market. Each resulting index is then seasonally adjusted and weighted to produce the HMI.

The BLS Consumer Price Indexes (CPI) produces monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services. Survey responses are seasonally adjusted and weighted to produce a composite index.

The Conference Board Leading Economic Index (LEI) is a composite economic index formed by averages of several individual leading economic indicators, which are weighted to produce the complete index.

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://biz.yahoo.com/mu/update.html

[2] http://www.fxstreet.com/fundamental/analysis-reports/piponomics/2012/06/18/

[3] http://news.yahoo.com/greeks-vote-election-could-decide-065554643.html

[4] http://www.businessweek.com/news/2012-06-17/germany-signals-willingness-to-loosen-greek-austerity-measures

[5] http://www.usatoday.com/money/economy/employment/story/2012-06-15/state-unemployment-rates-may/55621446/1

[6] http://www.usatoday.com/money/economy/story/2012-06-13/econ-reports-0614-cpi-jobless-claims/55592570/1

[7] http://www.businessweek.com/ap/2012-06/D9VDK7FG0.htm

[8] http://www.businessweek.com/articles/2012-06-15/oil-prices-keep-falling-but-a-strange-gap-persists

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