Pat Webb - Phase 2 Advisors
 
A Rally with Less Gusto
Weekly Update - February 11, 2013
In This Issue
Performance
Headlines
Recipe
Golf Tip
Health Tip
Green Fact
The Markets:

Markets lost some exuberance last week as news out of Europe weighed on U.S. investors. Despite some selling pressure however, the rally rolled on as the S&P 500 edged to a five-year high.[1] Major indices ended the week mixed, with the S&P 500 gaining 0.31%, the Dow losing 0.12%, and the Nasdaq gaining 0.46%.[2]

 

Friday showed very low volume as snowstorm Nemo pounded the Northeast and traders watched the clock, waiting for the final bell to ring so they could hustle home. Even so, a batch of encouraging economic data was enough to push the S&P 500 to its highest level since November 2007. Reports showed that international trade in China and Germany has improved, and that the U.S. trade deficit narrowed in December, indicating that global demand is improving.[3] To the contrary, the December wholesale inventory report released earlier in the week showed a 0.1% decrease, which was significantly worse than expectations. This carries negative implications for the upcoming revised fourth quarter GDP growth report as the Bureau of Economic Analysis had estimated inventory growth of 0.7% in their preliminary estimates.[4]

 

Troubles in Europe drove most of the market action last week as downbeat European equities prompted selloffs in the U.S. Scandals have rocked European markets as regulators investigate several banks for trading irregularities[5] as well as one of Greece's leading statisticians, who has been charged with falsifying fiscal data.[6] According to European Central Bank President Mario Draghi, the Eurozone economy remained weak and contracted in the second and third quarters of 2012. Two quarters of negative growth meets the technical definition of a recession, and economists widely expect the malaise to continue into 2013. On the positive side, recent gains in European equities and a strong Euro show that investors have regained confidence in the Eurozone's ability to clean up its mess.[7]

 

Looking ahead, analysts will have a few January and February economic reports to chew on this week, which economists widely expect will show that the U.S. economy started off 2013 at a modest pace. January retail sales figures come out on Wednesday, and the preliminary February reading on consumer sentiment will be released Friday.[8] Chinese markets will be closed all of this week in observance of the Chinese New Year, so attention will be focused on European and domestic headlines. While there is no way to know what will happen with the winter we've been enjoying, our primary hope is that the fundamentals will continue to show improvement in the worldwide economy.

 

ECONOMIC CALENDAR:

Tuesday: Treasury Budget

Wednesday: Retail Sales, Import and Export Prices, Business Inventories, EIA Petroleum Status Report

Thursday: Jobless Claims

Friday: Empire State Mfg. Survey, Treasury International Capital, Industrial Production, Consumer Sentiment

 



Performance


02_11_2013 Chart

Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized.
Sources: Yahoo! Finance, Treasury.gov. Past performance is no guarantee of future results.
Indices are unmanaged and cannot be invested into directly. N/A means not available.


Headlines


Winter storm sends fuel prices higher. The storm pounding the Northeast is also hitting consumers with a one-two punch of high home-heating costs on top of record-high gasoline prices. High prices are largely due to increased domestic and foreign demand for crude oil as well as potential supply disruptions due to the storm.[9]

 

Housing market may be a bubble. Economists think that the housing market may be showing signs of a bubble. Historically, housing prices rise about three to four percent a year; however, last year, home prices grew eight percent, a similar rate to before the crash in 2007.[10]

 

Political uncertainty dogs Spain and Italy. Selloffs hit European markets last week as investors show unhappiness with instability at the top of the two major European nations. Spanish President Mariano Rajoy is embroiled in a corruption scandal that threatens his tenure, and Italian Prime Minister Mario Monti may lose the February 24 election.[11]

 

Americans tapping into home equity again. Despite the nearly 11 million borrowers who are underwater on their mortgages, home equity loans are on the rise again. As home prices rise - increasing equity, and consumers regain confidence in the economy, borrowers are again turning to lines of credit on their houses to fund purchases, fueling a 19% rise in home equity loan originations.[12]

 

 

 

Quote of the Week

"When one door of happiness closes, another opens, but often we look so long at the closed door that we do not see the one that has been opened for us." 

- Helen Keller

Recipe of the Week

Baked Chicken With Veggies


02_11_2013_Recipe

Pair with a light salad for a perfect mid-week meal. Recipe from RealSimple.com.

Ingredients:

6 tablespoons olive oil

2 lemons, 1 thinly sliced, 1 juiced

4 cloves garlic, minced

1 teaspoon kosher salt

1/2 teaspoon freshly ground black pepper

3/4 pound trimmed green beans

8 small red potatoes, quartered

4 chicken breasts (bones left in, with skin, about 3 1/4 pounds)

 

Directions:

  1. Preheat oven to 450F. Coat a large baking dish or cast-iron skillet with 1 tablespoon of the olive oil. Arrange the lemon slices in a single layer in the bottom of the dish or skillet.
  2.  In a large bowl, combine the remaining oil, lemon juice, garlic, salt, and pepper; add the green beans and toss to coat. Using a slotted spoon or tongs, remove the green beans and arrange them on top of the lemon slices. Add the potatoes to the same olive-oil mixture and toss to coat. Using a slotted spoon or tongs, arrange the potatoes along the inside edge of the dish or skillet on top of the green beans.
  3. Place the chicken in the same bowl with the olive-oil mixture and coat thoroughly. Place the chicken, skin-side up, in the dish or skillet. Pour any of the remaining olive-oil mixture over the chicken.
  4. Roast for 50 minutes. Remove the chicken from the dish or skillet. Place the beans and potatoes back in oven for 10 minutes more or until the potatoes are tender. Place a chicken breast on each of 4 serving plates; divide the green beans and potatoes equally. Serve warm.


Golf Tip

Set Your Alignment

 

Many shots that are hit to the right or left get blamed on the swing when they are actually a product of poor alignment. In order to hit the ball at a target, you must line up correctly.

 

Before hitting, stand behind your ball about 3 to 5 feet so it is between you and your intended target. Now pick an object on the ground no more than two feet in front of the ball (a golf tee, blade of grass, leaf, or anything else) that lies on the imaginary line that goes from your ball to your intended target.

 

Walk up and address the ball while pretending the object on the ground is your target. Align the lines on your club face so they are perpendicular to the object. Do not even look at your real target until you have established your address, and then be sure not to change your stance.


Healthy Lifestyle

A Friend A Day Keeps the Doctor Away

 

Research shows that America's happiest people spend at least six hours a day with friends or family. A Harvard University study found that each happy friend in our network increases our happiness by nine percent. 

 

Green Living
Turn Your Car Off When Idling

If you see that a train, long stoplight, or traffic jam will block your vehicle for more than 30 seconds, turn off your engine to save gas and reduce carbon output. An idling vehicle burns more fuel than restarting your engine.


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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.

  

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[1] http://www.spokesman.com/stories/2013/feb/09/sp-at-5-year-high-rally-rolls-on/  

[2] http://www.briefing.com/investor/markets/weekly-wrap/weekly-wrap-for-february-4-2013.htm

[3] http://www.nbcnews.com/business/stocks-edge-higher-sp-500-highest-nov-2007-1B8307746 

[4] http://www.briefing.com/investor/markets/weekly-wrap/weekly-wrap-for-february-4-2013.htm  

[5] http://www.briefing.com/investor/markets/weekly-wrap/weekly-wrap-for-february-4-2013.htm  

[6] http://uk.reuters.com/article/2013/02/08/uk-greece-statistics-idUKBRE9170SO20130208  

[7] http://www.cnbc.com/id/100441862 

[8] http://blogs.wsj.com/marketbeat/2013/02/08/next-weeks-tape-new-year-off-to-a-modest-start/ 

[9] http://www.cnbc.com/id/100446710 

[10] http://www.cnbc.com/id/100435276 

[11] http://www.cnbc.com/id/100446234 

 
Pat Webb
Pat Webb - Phase 2 Advisors
8100 Turman Ct
Fort Collins, CO 80525
970-776-3306
patwebb@phase2adv.com
http://www.phase2adv.com