Foresight Wealth Management
The Bull Keeps Plowing Ahead
Weekly Update - July 22, 2013
In This Issue

Markets closed mixed for the week again, logging new highs for the S&P 500 and the Dow, while the Nasdaq lost ground due to some earnings misses. So far, Wall Street is experiencing its best month this year since January, buoyed by reassurances from the Fed and generally positive economic data. For the week, the S&P 500 gained 0.71%, the Dow increased 0.55%, and the Nasdaq lost 0.35%.[1]

Fed Chairman, Ben Bernanke, testified before the House and Senate last week and reemphasized his role as the Fed's chief soother. His comments were very much in line with previous speeches, underlining that the Fed will base quantitative easing decisions on incoming economic data. While asset purchases may indeed be pared back by the end of the year, the program could also be left unchanged should economic data prove to be less than positive.[2]

 

As if to underscore the delicateness of the economy, housing data released concurrently with Bernanke's speech seemed to be in favor of leaving asset purchases where they are. June housing starts missed expectations, largely due to a 26.2% decline in multi-family units. The MBA Mortgage Refinance index hit a two-year low, indicating that rising interest rates may be cutting into loan applications.[3] Even so, single-family starts are still up 11.5% from a year ago, and we are wise not to get worked up over every bit of fluctuation in the data.

 

Second quarter earnings season is in full swing, and the news is mixed. Of the roughly 20% of S&P 500 companies that have already reported, 65% have beat earnings estimates, and 51% have beat revenue estimates. Corporate managers have done a good job of managing investor expectations ahead of earnings season, so that even moderate results look positive. However, revenues are still down as compared to last quarter, indicating that many businesses are struggling with demand. Interestingly, companies that depend on domestic revenue sources are doing better than those that depend on foreign demand.[4]

 

For the first time in weeks, the Fed will keep a low profile ahead of the FOMC meeting on July 30 and 31, and earnings data will dominate headlines as we head into the second quarter's busiest reporting period. About a third of the S&P 500 companies are due to report, including heavy hitters like Apple, McDonald's, Facebook, and Boeing.[5] While positive earnings beats could cause the market rally to continue, volatility is likely and it is also possible that mediocre data could cause a pullback in the short term.

 
ECONOMIC CALENDAR:
Monday: Existing Home Sales
Wednesday: PMI Manufacturing Index Flash, New Home Sales, EIA Petroleum Status Report
Thursday: Durable Goods Orders, Jobless Claims
Friday: Consumer Sentiment  

 

 

 

 
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. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.

 

Motor city runs out of gas. The city of Detroit declared bankruptcy, becoming the largest city in the U.S. to seek Chapter 9 protection from creditors. The bankruptcy process will define which creditors (including unions) will be able to compete for the city's limited settlement resources.[6]


China implements lending reform. In an effort to fight tight credit conditions, China's central bank announced reforms that removed controls on the rates banks may charge clients on loans. Under the new rules, banks can lower rates as low as they like to attract lenders.[7]


Jobless rate rises in 28 states. Highlighting the bumps in the road toward economic recovery, the latest Labor Department report shows that jobless claims fell last week in only 11 states. Jobs data is notoriously unreliable in July as seasonal factors can cloud estimates; analysts will pay closer attention to the less-volatile monthly claims number.[8]


Fed report shows Atlantic coast factory activity up. The Philadelphia Federal Reserve Bank said factory activity in eastern Pennsylvania, southern New Jersey, and Delaware rose to its highest level in more than two years as employment and shipping activity increased.[9] 

 

 

 

Quote Of The Week
Quote Of The Week
Fountain Pen

 

"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 from RealSimple.com.
Tax Tips
Tax Tips
Document

Deduct Charity Travel Expenses

 

If you travel while doing charity work, you may be able to deduct some of your travel costs. According to the IRS, here are five things you should know:

 

1. The charity must be an IRS-qualified tax-exempt organization.
2. You cannot deduct the value of your services, only unreimbursed travel expenses.
3. The deduction only qualifies when charity is the purpose of the trip, not recreation or vacation.

4. You must have real duties and responsibilities in order to deduct travel expenses.
5. Deductible travel expenses may include: 

  • Air, rail, and bus transportation
  • Car expenses
  • Lodging costs
  • Meal costs
  • Taxi fares or other transportation costs between the airport or station and your hotel
Golf Tip
Golf Tip
Golfer

Move Up!

 

Having trouble achieving a mental breakthrough? Try playing from the forward tees in order to alter your comfort zone and lower your scores. Playing a shorter course will instill a "go-for-par" or birdie mindset that will stick with you when you return to your accustomed tees. If you can't score any better from the forward tees, consider it a message that you need extra work on your short game! Sometimes the simplest advice pays the greatest dividends.
 

Healthy Lifestyle
Healthy Lifestyle
Medical Cross

Stay Informed

 

Obtaining up-to-date information on health issues can help you make better decisions about your lifestyle and personal health. Here are three sites that provide important information about health issues:

Green Living
Green Living
Leaf

Put Old Beer to Good Use

 

If you have a few half-empty bottles of beer after a party, don't just pour them down the sink. You can pour them over your compost pile, where the yeast will give the microbes a boost and the beer is a good source of nitrogen.
 
 


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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 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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[1]  http://briefing.com/investor/markets/weekly-wrap/weekly-wrap-for-july-15-2013.htm


[2[  http://briefing.com/investor/markets/weekly-wrap/weekly-wrap-for-july-15-2013.htm


[3]  http://briefing.com/investor/markets/weekly-wrap/weekly-wrap-for-july-15-2013.htm, http://marketrealist.com/2013/07/must-know-mba-refinance-index-hits-a-2-year-low-good-for-mortgage-reits/ 


[4]  http://www.cnbc.com/id/100900409


[5]  http://www.cnbc.com/id/100900409


[6]  http://www.usatoday.com/story/news/nation/2013/07/18/detroit-prepares-bankruptcy-filing-friday/2552819/


[7]  http://www.cnbc.com/id/100889064


[8]  http://www.reuters.com/article/2013/07/18/us-usa-states-employment-idUSBRE96H1DE20130718


[9]  http://www.reuters.com/article/2013/07/18/us-usa-economy-idUSBRE96A0G320130718

 

 

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