Pat Webb - Phase 2 Advisors

Can the Sugar Rally Stick?

Weekly Update - August 13, 2012
In This Issue
Golf Tip
Health Tip
Green Fact
The Markets:

After a very quiet summer week on Wall Street (half the traders must have been on vacation), markets closed up, consolidating the gains made since the June 4th low. Last week the S&P gained 1.07%, the Dow picked up 0.85%, and the Nasdaq gained 1.78%. Before getting into what transpired last week, let's take a moment to reflect on how far we've come this year. The S&P has been positive eight weeks out of the last ten, has gained 11.79% for the year, and is up 25.44% since this time in 2011.[1] Despite a rocky second quarter and concerns about a double-dip recession, the markets are actually performing well. We know it can be hard to maintain composure when markets hit turbulence, but overall equity performance is getting better.[2]


Federal Reserve Chairman Ben Bernanke started off Monday with reassurances that broad market measures are still pointing towards a recovery.[3] While he didn't discuss monetary policy, we can be sure he recognizes that the economy isn't out of the woods yet and is still prepared to take action if needed. Though the week was light on economic news, jobless claims turned up lower than expected and our trade deficit narrowed, indicating that the economy is doing better, overall.[4] Markets ticked up after his remarks, continuing their quiet rally.


Analysts have been surprised by the stealthy summer rally, as corporate revenues are down and economic fundamentals are still lukewarm. One explanation for why stocks are moving higher despite weak market internals is that traders expect Fed action next month. The downside to this is that if the Fed disappoints, equities could tumble. As we get closer to the end of the year, we can also expect additional media focus on the impending fiscal cliff, the expiration of tax cuts, and deep government spending cutbacks due to kick in January 1st. If the federal government doesn't develop a plan, it could definitely rein in any market gains for the year.


In short, let's remain cautious about our summer 'sugar high' rally, and understand that there will likely be additional turbulence ahead as election season heats up, the Fed announces its policy plans, and investors turn to our leaders for decisive action. 



Tuesday: Producer Price Index, Retail Sales, Business Inventories

Wednesday: Consumer Price Index, Empire State Mfg. Survey, Treasury International Capital, Industrial Production, Housing Market Index, EIA Petroleum Status Report

Thursday: Housing Starts, Jobless Claims, Philadelphia Fed Survey

Friday: Consumer Sentiment



08-13-2012 WMU

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.



USDA revises crop estimates lower because of historic drought. The USDA reduced its forecasts for corn and soybean crops due to the impact of the drought on the Corn Belt. Analysts were shocked at the dramatic reduction, which is down 13% since 2011 and will strongly affect food and commodities prices later this year. Some analysts believe that overall food prices could go up by as much as 5% next year.[5]


Mortgage rates remain above 3.5% for second week. Interest rates on fixed rate mortgages rose to 3.59% after dropping to an historic low of 3.49% two weeks ago. Interest rates tend to follow Treasury yields, and the increase in rates has followed positive economic announcements, which have reduced demand for Treasury securities.[6] 


U.S. trade deficit falls to lowest level in 18 months. The trade deficit fell in June, helped by a steep drop in oil imports and a modest increase in exports. Despite Europe's troubles, exports to the Eurozone increased by 1.7%.[7]


Unemployment claims fell to 361,000 last week, consistent with modest gains in hiring. Despite July numbers skewed by seasonal factors, the distortions seem to have stopped and the job market may have pulled out of its midyear slump. Although the job market is not healthy, the economy added 163,000 new jobs in July, the biggest increase since February.[8]




Quote of the Week
"It is our attitude at the beginning of a difficult task which,  
more than anything else, will affect its successful outcome."


- William James
Recipe of the Week

Chocolate Chip Cookies With
Marshmallows and Pistachios


08-13-2012 WMU

Chocolate chip cookies and gooey marshmallows blend perfectly in this simple dessert that will delight adults and kids alike. Recipe from



2 marshmallows

2 chewy chocolate chip cookies

1 tablespoon chopped salted roasted pistachios



Heat broiler. Place the marshmallows on a foil-lined baking sheet and broil, turning once, until golden brown, 30 seconds per side.

Top one of the cookies with the marshmallows and pistachios. Sandwich with the second cookie.


Golf Tip

A Drill to Achieve Better Contact

To build a more precise swing, practice the "Gateway Drill." Stick two tees in the ground just outside the heel and the toe of your driver (About 1 half inch on either side). Tee up a ball directly between the tees, and then swing the clubhead through the "gateway." If the clubhead isn't clipping the tees, you should be making contact in the center of the club face.


Healthy Lifestyle

Enjoy the Benefits of Deep Breathing

Even when you're not feeling stressed, take a few moments each hour to enjoy a few deep breaths. By building the habit before you need it, you'll be better prepared to ward off stress and anxiety naturally. 


Here's how to do it: 


Close your eyes, relax your body and slowly and consciously breathe into the abdomen. Repeat for three to four rounds while being mindful of your body and quieting your mind.


This stress-relieving mini-break allows your body to relax, replenishes your oxygen, and can relax your mind by clearing it of distractions. Taking a couple of minutes each hour to relax will allow you to be more productive, focused, and centered.


Green Living

Green Travel Tips  


Making green choices when you travel can have a huge impact on your overall environmental footprint. Consider these tips when you're booking your next vacation.


* Fly as little as possible. Land-based transportation uses much less energy.

Walk, bike or use public transportation whenever you can.

When booking accommodations, look for sustainably-certified hotels, B&Bs and lodges.

Reduce your water usage by reusing towels and bed sheets at your hotel instead of switching them out every day.

Unplug appliances when you leave your room - the same as you would at home.



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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.


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