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The Markets
They say that optimism is catching. The performance of markets across the globe last week certainly supported the idea.
During the second week of January, there was reason for optimism about the housing market as data showed that housing starts exceeded economists' expectations and home construction appeared to be on the rebound. Last week, the National Association of Realtors disclosed that very low mortgage rates, falling unemployment, and one of the most affordable housing markets on record helped make 2011 the best year for home sales since 2007.
In addition, earnings season - the period of each quarter during which public corporations announce their quarterly earnings to the public - moved into high gear. Generally solid corporate earnings drive markets higher. This helped the Standard & Poor's 500 Index close above 1,500 for the first time in more than five years.
Across the pond, the European Central Bank announced that banks plan to repay 137 billion Euros next week much earlier than many had expected. Markets interpreted the news as a sign that European financial systems may be on the mend. Global stock markets gained strength and the Euro reached its highest level in nearly a year against the U.S. dollar. Interest rates in Italy and Spain, some of the weaker links in the Eurozone economy in recent years, fell significantly during the week offering further evidence that investors' optimism and appetite for risk was on the rise.
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Data as of 1/25/13
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1-Week
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Y-T-D
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1-Year
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3-Year
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5-Year
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10-Year
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Standard & Poor's 500 (Domestic Stocks)
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1.1%
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5.4%
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13.3%
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11.1%
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2.5%
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5.9%
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10-year Treasury Note (Yield Only)
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2.0
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N/A
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2.0
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3.6
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3.6
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3.9
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Gold (per ounce)
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-1.7
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-2.0
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0.6
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14.9
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12.6
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16.2
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DJ-UBS Commodity Index
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-0.6
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1.1
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-3.4
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1.3
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-5.6
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2.0
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DJ Equity All REIT TR Index
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1.3
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5.0
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18.5
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21.5
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7.4
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12.9
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Notes: S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron's, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
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