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What Pushed the Major Indexes Up?
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WEEKLY UPDATE - FEBRUARY 17, 2015
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Stocks ended another positive week at record highs, sending the Dow above 18,000 and the S&P 500 to a new record close. Investors reacted positively to firming oil prices and news of a possible peace deal in Ukraine. For the week, the S&P 500 gained 2.02%, the Dow rose 1.09%, and the Nasdaq grew 3.15%.[1]
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There were a few factors behind the week's rally, which erased previous losses and brought the major indexes back to positive for the year. Oil prices, which have been falling steadily for months, may be bottoming out as production declines and the number of oil rigs fall. Markets have been sensitive to oil prices and a slight bounce last week was enough to send stocks higher.[2]
The deteriorating financial situation in Greece was also in focus. As Greece nears its deadline for a new round of loans from the EU, encouraging remarks from Greek leaders suggest that an 11th-hour deal may be possible. Greece is seeking a new debt agreement with EU lenders that would allow it to back out of the painful austerity measures that have been imposed by creditors since 2010. If no agreement is reached, Greece would probably seek loans from alternative sources (like Russia or China), potentially damaging internal financial relations within the EU.[3]
Investors also reacted positively to better-than-expected growth numbers from Europe, which showed that the Eurozone economy grew 0.3% in the fourth quarter of 2014. Germany's economy outperformed, growing 0.7% on strong domestic demand. Even better, only three countries in the 18-member zone experienced economic contractions: Greece, Finland, and Cyprus.[4]
Oil will likely be the source of more market activity during this holiday-shortened week as analysts try and determine whether crude oil prices may be stabilizing. The effects of a Russia-Ukraine ceasefire may also ripple through oil markets, causing additional volatility, though we can hope for further market growth.
ECONOMIC CALENDAR:
Monday: U.S. Markets Closed For Presidents' Day Holiday
Tuesday: Empire State Mfg. Survey, Housing Market Index, Treasury International Capital
Wednesday: Housing Starts, PPI-FD, Industrial Production, FOMC Minutes
Thursday: Jobless Claims, PMI Manufacturing Index Flash, Philadelphia Fed Survey, EIA Petroleum Status Report
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Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized. Sources: Yahoo! Finance and Treasury.gov. International performance is represented by the MSCI EAFE Index. Corporate bond performance is represented by the DJCBP. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.
HEADLINES:
Consumer spending lags in January. Retail sales, a core measure of how Americans spend, edged up barely 0.1% after dropping 0.3% in December. This report suggests that Americans are not using fuel savings to boost their spending, which could trim Q1 economic growth.[5]
Small business sentiment downbeat. Optimism about the economy fell last month among small business owners who worried about sales and decreasing inventory spending. However, sentiment about the labor market remains positive.[6]
Weekly unemployment claims rise unexpectedly. The number of Americans filing new unemployment claims rose slightly last week. Seasonal issues - including major snowstorms in Massachusetts - may have affected data collection and underlying labor trends still show strength.[7]
U.S. business inventories increase slightly. Inventories, a key factor of economic growth, edged up just 0.1% in December, supporting views that growth slowed in the fourth quarter.[8]
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"Look at a day when you are supremely satisfied at the end. It's not a day when you lounge around doing nothing; it's when you've had everything to do, and you've done it."
- Margaret Thatcher
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Indulge your sweet tooth with these delicious brownies.
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Makes 16 brownies
Ingredients:
Nonstick cooking spray or butter wrapper
3/4 cup all-purpose flour
1/3 cup unsweetened cocoa powder
1/4 teaspoon kosher salt
1/2 cup (1 stick) unsalted butter, cut into pieces
6 ounces semisweet baking chocolate, chopped
1 1/2 cups sugar
1 teaspoon pure vanilla extract
4 large eggs, room temperature
Directions:
- Preheat oven to 350�F and generously spray or grease an 8-inch square baking pan.
- Combine the flour, cocoa powder, and salt in a medium bowl.
- Make a double boiler by heating one inch of water in a saucepan to boiling and then placing a metal bowl inside. Make sure the bowl isn't touching the water. Melt the butter and chocolate, stirring frequently until just combined.
- Remove the bowl from the boiler and add the sugar and vanilla. Let the mixture cool slightly. Beat in the eggs one at a time and then add the mixture to the dry ingredients. Mix the batter with a spatula until just combined.
- Pour into the square pan, smoothing with the spatula, and bake approximately 30 minutes until done.
- Cool completely in the pan and then cut into squares.
Recipe adapted from RealSimple.com[9]
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How To Order a Previous Year's Tax Return From The IRS
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There are many reasons to need an old tax return. You may need it to file this year's taxes, apply for a mortgage, or to fill out student loan paperwork. Fortunately, the IRS makes it pretty easy to get an old transcript or return. Here are several ways for you to get what you need:
- A tax return transcript shows most line items from your return and any attached forms and schedules filed in previous years, though it won't show any changes made after filing. In most cases, it will have all the information a lender needs.
- You can request a free transcript for the past three tax years online, over the phone, or by mail. Allow 10 days for phone and online orders and 30 days for mailed requests.
- You can also get an actual copy of your tax return for the previous six tax years. The fee for each copy is $50, and you can request copies by mail from your local IRS office.
For more information on requesting tax returns and transcripts, visit IRS.gov/forms or speak with a qualified tax professional.
Tip courtesy of IRS.gov[10]
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Are You Posting Up Properly?
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Too much lateral movement or sway in your body when you swing can lead to a host of problems: Inconsistent contact, weak loft, or a lack of power can all be symptoms of poor weight transfer.
In your swing, your left hip (for a right-handed golfer) should shift until it's directly over your left heel. However, you shouldn't move by flexing your knee or swaying. Instead, you should transfer the weight by straightening your left leg. Driving your weight into the finish by straightening your leg is called posting-up, and pro golfers typically achieve this by leaving their left hip significantly higher than their right.
Practice swings in front of a mirror or using a video recorder to see whether your lower body is moving efficiently and that you're posting up correctly. If you have knee problems or experience any pain when straightening your leg, check with a medical professional before training further.
Tip courtesy of Scott Young, GolfTEC | Golf Tips Mag[11]
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Hearing Loss Cure Showing Promise
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If you're one of the estimated 48 million of Americans suffering from hearing loss, you may one day be able to get your hearing back with the help of one of several new drugs. Currently, several drugs are in trials and early tests are showing promise. However, it may still be years before a hearing loss drug hits markets, so protect your hearing by:
- Using ear protection when using power tools.
- Avoiding harmful noises or loud environments.
- Turning down the volume, especially on in-ear headphones.
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Instead of leaving your water heater and furnace running all night, consider installing a timer that shuts them off at night and restarts them before you wake up in the morning. In some parts of the country, you can also reduce the cost of your electrical bill by limiting high-energy activities to early mornings and evenings since some providers raise rates during primetime or critical hours.
Tip courtesy of Green Living[13]
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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 Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.
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 Dow Jones Corporate Bond Index is a 96-bond index designed to represent the market performance, on a total-return basis, of investment-grade bonds issued by leading U.S. companies. Bonds are equally weighted by maturity cell, industry sector, and the overall index.
The S&P/Case-Shiller Home Price Indices are the leading measures of U.S. residential real estate prices, tracking changes in the value of residential real estate. The index is made up of measures of real estate prices in 20 cities and weighted to produce the index.
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.
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, Broker dealer or Investment Advisor, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor 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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