Pat Webb - Phase 2 Advisors

Financials Lead; Results Flat

Weekly Update - July 16, 2012

In This Issue
Golf Tip
Health Tip
Green Fact
The Markets:

Equity markets managed to break a losing streak and closed basically flat for the week as second quarter earnings season kicked off. The S&P gained 0.16%, the Dow grew 0.02%, and the Nasdaq lost 0.98%. Friday saw earnings released by financial heavyweights J.P Morgan Chase (JPM) and Wells Fargo (WFC), which provided a much-needed boost to the financial sector. Although J.P. Morgan posted losses of $4.4 billion, - contaminated by bad trades and write offs - strong performance from their Investment Bank and Housing unit suggests the bank is on its way back to health. Wells Fargo also posted better-than-expected results as the housing sector boosted their quarterly performance.[1] While these first reports were largely seen as positive, many are still expecting lackluster performance from tech and other sectors. [2]


Unemployment claims temporarily sank last week; however, a major factor in the drop is that automakers reduced or missed some of their usual seasonal shutdowns to keep up with demand, leading to fewer summer layoffs. Analysts expect unemployment claims to rise again in coming weeks.[3] On a positive note, the rise in demand for cars indicates that consumer spending on big-ticket items is still strong.


Investors will be paying close attention to Ben Bernanke's speeches to the House and Senate next week, looking for indications that the Fed is considering further quantitative easing. Last week's FOMC minutes did not mention further easing, but reported that the Fed was examining additional stimulus tools. This may suggest that policymakers are concerned about whether their arsenal is running low on firepower. The minutes also show that officials are worried about the effects of tax hikes due in January 2013 and the spending cuts that will kick in at the end of the year.[4] We worry about this too. Let's hope the politicians do their job.


Earnings season will start in earnest next week and we can expect results to dominate the headlines. A slew of economic reports are also due to be released, hopefully showing us a way out of the doldrums we've been experiencing these past few weeks.



Monday: Retail Sales, Empire State Mfg. Survey, Business Inventories

Tuesday: Consumer Price Index, Treasury International Capital, Industrial Production, Housing Market Index, Ben Bernanke Speaks 10:00 AM ET

Wednesday: Housing Starts, Ben Bernanke Speaks 10:00 AM ET, EIA Petroleum Status Report, Beige Book

Thursday: Jobless Claims, Existing Home Sales, Philadelphia Fed Survey, Leading Indicators


07-16-2012- WEEKLY UPDATE

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.



Domestic energy supplies save Americans money. A recent report finds that the economic benefits of domestic energy production could be as much as $1 billion per day in cost savings. The savings from domestic natural gas and finished petroleum products could be saving the U.S. from another recession.[5]


China beats GDP growth expectations. China reported 7.6% GDP growth, beating economists' expectations and bolstering hope that the Chinese economy is doing better than expected. Stocks rebounded on the news Friday.[6]


Wholesale prices rose slightly in June. After falling for two straight months due to lower energy costs, the Labor Department reported that the Producer Price Index had risen slightly in June by 0.1%. A major factor in the rise is increased food costs, which are offsetting the drop in energy prices.[7]


Prolonged Midwestern drought could increase food prices. Ongoing droughts in states like Ohio and Missouri have damaged corn and soybean yields, leading to higher grain prices for livestock. This may be felt by consumers in the form of higher food prices later this year.[8],[9]



Quote of the Week
"I have found that if you love life, life will love you back."

- Arthur Rubinstein

Recipe of the Week

Maple-Glazed Salmon with Pineapple 

07-16-2012 WEEKLY UPDATE

Not only is this meal easy to prepare and delicious, but the salmon provides beneficial Omega 3 fatty acids. Recipe from



1 cup white rice

1/2 cup maple syrup

2 tablespoons Dijon mustard

4 6-ounce salmon fillets

1 1/2 teaspoons kosher salt

1/2 teaspoon black pepper

1/2 fresh pineapple, peeled

1 jalapeño, seeded and finely chopped



1) Cook the rice according to the package directions.

2) Whisk together the maple syrup and mustard in a small saucepan over medium heat and bring to a boil. Simmer until slightly thickened, about 5 minutes. Remove from heat and set aside.
3) Heat broiler. Place the salmon in a foil-lined 9-by-13-inch baking dish. Season with the salt and pepper.
4) Cut the pineapple lengthwise into quarters, then cut each quarter into ½-inch-thick triangles. Scatter the pineapple and jalapeño around the salmon.
5 )Brush the salmon with the syrup mixture and broil for 5 to 7 minutes or until it flakes easily and is the same color throughout.
6) Serve the salmon and pineapple with the rice and drizzle with the remaining glaze, if desired.

Golf Tip

Short Game. Short Game. Short Game!

If you want to knock some strokes off your score fast, focus on your short game! Believe it or not, about half your shots are struck from within 60 yards of the flag stick. And yet, most golfers spend the majority of their time practicing with the driver.


To see a radical improvement in your game, you must make a radical change in the way you practice. Try this: For two weeks, devote 90% of your practice time to chipping and putting, and only 10% to driving. If you stick to this training regimen, you'll cut five strokes off your game in no time. 


Healthy Lifestyle

Take Calcium in Doses

We all know that calcium is critical to building strong bones and warding off osteoporosis. However, our bodies can only absorb so much calcium in a single dose. Don't be tempted to take all your calcium supplements at once or wash down your pill with a tall glass of milk. Our bodies absorb calcium best in increments of 500 mg or less - so split up your supplements into smaller doses taken multiple times during the day.

Green Living

Clean the Air with Plants

In addition to being aesthetically pleasing, houseplants can actually improve your indoor air quality by filtering and removing pollutants. Here are some quick tips to turn your houseplants into your own clean air factory:

  • Plan on having one houseplant for each 10 square yards
  • By mixing night-active plants like orchids into your regular plants you can keep the cycle going all night
  • Invest in a mix of plants to filter out as many pollutants as possible. Examples: Philodendrons and aloe plants for formaldehyde (often present in carpets and upholstery).Gerbera daisies, peace lily, and English ivy for benzene and trichloroethylene (common household chemicals).

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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 Pending Home Sales Index, a leading indicator of housing activity,  measures housing contract activity, and is based on signed real estate contracts for existing single-family homes, condos and co-ops.  The PHSI looks at the monthly relationship between existing-home sale contracts and transaction closings over the last four years. The results are weighted to produce the index.


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.

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