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Greetings!
2011 could be a good year for investors. The greatest risk we see is Spain defaulting, not the other European countries in the press today. In China, we see inflation as a distinct possibility and wonder when and how the US debt and Chinese currency war will resolve itself otherwise.
In the USA, we see slower growth relative to much of the rest of the world. Interest rates will stay low, we believe. Unemployment will be bad, and folks who are not afraid to think outside the box of their experience, who can look for work, and create their own work, will be rewarded.
However, particularly in Colorado, much of the old work is not coming back. Home prices may be overstated, and they may fall further. The supply of homes could increase with even more foreclosures coming. Thus, folks who used to work in the related sectors may need to go elsewhere.
One of our key research partners is Litman Gregory. We encourage you to read their 2010 summary email:
In spite of the challenges, Litman Gregory likes the future and so does your investment team at A&I Financial Services.
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| Economic Briefs |
HOW DO WE INTERPRET THIS JOBS REPORT?
America's unemployment rate fell four-tenths of a point in December to 9.4%. On the surface, that sounds great - after all, that is the biggest one-month drop in the jobless rate in 12 years. Beneath the surface, it wasn't so great. Labor Department figures show that 453,000 people dropped off the unemployment rolls last month, yet only 103,000 people found new non-farm jobs. So perhaps the dip in the jobless rate mostly reflects job seekers giving up the hunt. In contrast to federal data, ADP's new payrolls report indicates 297,000 new private sector jobs for December. (1,2)
ISM FINDS CONTINUING EXPANSION
The Institute for Supply Management's twin purchasing manager index surveys came out last week. Its manufacturing PMI came in at 57.0 for December, while its service sector PMI came in at 57.1. New orders were up 5.3% in the service sector survey with business activity/production increasing 6.5%. (3)
OIL & GOLD PULL BACK TO OPEN THE YEAR
Oil had its poorest week in two months last week, as prices fell $3.35 per barrel across five trading days to $88.03. Gold slipped $52.60 last week; futures settled at $1368.50 an ounce Friday. Was this because of a stronger dollar, investors locking in profits at the start of a new year, a shift in sentiment, or all of the above? Was it just a selloff or an omen of correction? Bulls are watching and waiting. (4)
BIG 7 AUTOMAKERS SEE NICE 2010 SALES GAINS
The world's seven major automobile manufacturers enjoyed a collective 9.7% year-over-year increase in sales for 2010, according to figures compiled by MarketWatch. Toyota was the only one of the seven to see a 2010 sales drop, while Hyundai's 2010 U.S. sales improved by more than 30%. Sales across the big seven (Ford, Nissan, Hyundai, Honda, GM, Toyota and Chrysler) were up 33.3% in December. (5) |
| Market Summary |
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% Change |
Y-T-D |
1Yr Chg |
5-Year Avg | |
DJIA |
+0.84 |
+10.07 |
+1.31 | |
NASDAQ |
+1.90 |
+17.53 |
+3.45 | |
S&P 500 |
+1.10 |
+11.37 |
-0.15 |
(Source: cnbc.com, bigcharts.com, ustreas.com, bls.gov, 1/7/11) |
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Create a beautiful week!
Karl Frank, MBA, MSF
Certified Financial Planner (R)
A & I Financial Services LLC
303.690.5070
Citations:
1 - blogs.forbes.com/johndobosz/2011/01/07/the-harsh-reality-of-the-falling-unemployment-rate/ [1/7/11]
2 - csmonitor.com/Business/2011/0107/Unemployment-rate-drops-to-9.4-percent-but-little-cheer-in-jobless-report [1/7/11]
3 - ism.ws/ISMReport/NonMfgROB.cfm?navItemNumber=12943 [1/5/11]
4 - blogs.wsj.com/marketbeat/2011/01/07/data-points-energy-metals-435/ [1/7/11]
5 - theatlantic.com/business/archive/2011/01/auto-sales-jumped-in-december/68877/ [1/4/11]
This material has been prepared and is distributed solely for information purposes only. It is not a solicitation or an offer buy any securities or instrument or to participate in any trading strategy. There is no assurance that a particular trading strategy will achieve investment success. |
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| Words for Thought |
Trying to determine what is going on in the world by reading newspapers is like trying to tell the time by watching the second hand of a clock.
-Ben Hecht (1894-1964) |
| Happy Holidays on a Budget | |
Karl Frank & Cameron Morgan were featured in the Denver Post. They talked about how to have a happy holiday while sticking to a budget.
Click here to read the article. |
| View our Money Makeovers |
| Karl Frank, Certified Financial Planner, provided several Money Makeovers for families on CBS Channel 4.
Learn more!
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| | View The Financial Planning Association Video | |
Karl Frank and many other Financial Planners offered pro-bono advice to thousands at the first annual "FPA Financial Planning week."
Click on logo below to view video. |  |
| Riddle of the Week |
Complete these words by putting the same 3 letters into each one: F---RISH, C---DY, S---GH. Last week's riddle:
By rearranging the letters in the phrase VIEWING A STIR, you can make the name of a U.S. state. What state is it? (This state has 12 letters in its name.)
Last week's answer:
West Virginia.
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