Greetings!
As you've no doubt noticed, global stock markets have declined sharply in recent weeks, hit by concerns over economic growth, sovereign debt crises, and shrinking odds of further stimulus. However, we think that the selling seems to be overdone, with sentiment overtaking fundamentals in many cases. The market appears to be pricing in a high likelihood of recession, but we don't think the data supports it. In our view, current stock valuations are attractive, and high-quality bond prices are unattractive. To Read the full commentary please Click Here to download the PDF version which includes charts and is approved for client use. (1) |
| Weekly Economic Update | |
HIRING IMPROVES...WITH A FOOTNOTE
Economists polled by MarketWatch had expected non-farm payrolls to increase by 59,000 for September. In a nice surprise, the economy added 103,000 jobs. However, 45,000 of those "hires" were actually striking Verizon employees returning to work. The unemployment rate remained at 9.1% for the third straight month. The Department of Labor revised the July and August jobs reports to include a cumulative 99,000 new hires. (2)
ONE ISM INDEX RISES, ANOTHER RETREATS
The start of the month brings fresh PMIs from the Institute for Supply Management. ISM's service sector index lost 0.3 points between August and September, but the reading for last month came in at a decent 53.0. Its manufacturing index rose a full percentage point in September to 51.6. (3)
AUTO SALES PICK UP
September's Commerce Department report showed big demand for domestic car brands: Ford sales rose 9%, GM sales 20% and Chrysler sales 27%. Overall U.S. auto sales were 9.9% improved from September 2010. (4)
RATES ON 30-YEAR FRMS DIP BELOW 4%
Those who can qualify for a refi or want to chance buying will find the lowest home loan rates on record right now. Freddie Mac's October 6 Primary Mortgage Market Survey reported an average interest rate of 3.94% for conventional 30-year home loans and 3.26% for 15-year fixed-rate mortgages. (5)
OVERSEAS DECISIONS HELP STOCKS REBOUND
Last week, the European Central Bank announced it would address the EU debt crisis with year-long loans and covered bond purchases. That news and some mildly positive stateside indicators sent stocks higher. Last week's performances: S&P 500, +2.1% to 1,155.46; DJIA, +1.7% to 11,103.12; NASDAQ, +2.7% to 2,479.35. (6,7) |
| Trust Company of America Announcement | |
Trust Company of America announces a new web site with new, easier-to-understand graphics and features. I think you will appreciate it. They did research with advisors like us and clients like you to find out how to improve, and they've done a great job. Here is a short video explaining the new software, codenamed "Liberty." Check it out! (8)
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| Market Summary |
|
% Change |
Y-T-D |
1Yr Chg |
5-Year Avg | |
DJIA |
-4.10 |
+1.41 |
-1.26 | |
NASDAQ |
-6.54 |
+4.01 |
+1.56 | |
S&P 500 |
-8.12 |
-0.22 |
-2.88 |
(Source: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov - 10/7/11). Past performance is no guarantee of future results. Indices are unmanaged, and investors cannot invest in them directly. |
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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) - http://home.mp.morningstar.com/elabsLinks/
TalkingPoints10052011.pdf
(2) - marketwatch.com/story/september-data-show-improvement-in-jobs-market-2011-10-07 [10/7/11]
(3) - ism.ws/ISMReport/NonMfgROB.cfm [10/5/11]
(4) - reuters.com/article/2011/10/03/autos-sales-idUSN1E7920NK20111003 [10/3/11]
(5) - businessweek.com/ap/financialnews/D9Q717681.htm [10/6/11]
(6) - usatoday.com/money/index [10/7/11]
(7) - online.wsj.com/article/SB100014240529702033888045766164402
44686706.html [10/7/11]
(8) - http://www.youtube.com/watch?v=Y031CrTZBAo
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.
Securities offered through Geneos Wealth Management, Inc., member FINRA/SIPC. Investment advisory services offered through A & I Financial Services LLC, registered investment advisor.
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| Words for Thought |
"Innovation is saying 'no' to 1,000 things." Steve Jobs |
| Watch Karl Frank's interview on MoneyLine9 9NEWS on May 9, 2011 | |
Click Here
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| Watch Karl Frank on Channel 9 News & Read his article "Where to Invest in Times of Turmoil" | |
Click Here
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| Read about us in the Denver Post | |
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. |
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Riddle of the Week |
Just two U.S. states have capital cities whose names include the full name of the state. What states are they?
Last week's riddle:
I can't be seen, but I'm all around. I have no mouth, yet can make a sound. I can be harnessed, but never bound. No hands have I, yet I move the ground. What am I?
Last week's answer:
The wind
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