Market Commentary | Captains Log

Archive for the ‘Market Commentary’ Category

Stocks mixed, but retain most of first quarter’s gains

Monday, May 7th, 2012

Stocks dipped in the first part of April and then recovered somewhat, as strong corporate earnings contended with weaker than expected economic growth in the U.S. and the resumption of negative news from Europe. After advancing for six months straight, the Dow Jones Industrial Average eked out a tiny gain for April, although other major averages were down slightly. Repeating its pattern of the last two years, the market has paused after a strong rally (the S&P 500’s 12% gain in the first quarter of 2012 was its best in more than 10 years) as investors await clues as to the strength of the economy and the sustainability of corporate profits.

The major averages varied only slightly from where they finished the first quarter, as shown in the table below.

	3/30/12 Close	4/30/12 Close	Change	Gain/Loss
DJIA	13,212.04	13,213.63	+1.59	+0.01%
NASDAQ	3,091.57	3,046.36	-45.21	-1.46%
S&P 500	1,408.47	1,397.91	-10.56	-0.75%

According to the initial report from the Commerce Department, U.S. gross domestic product grew by 2.2% in the first quarter, less than many economists had expected. However, the advance quarterly reports are revised – sometimes significantly – before the final figure is computed, meaning that no firm conclusions can be drawn as yet as to the economy’s future strength. Consumer spending, which accounts for about 70% of GDP, rose more than anticipated in the first quarter, helped by mild weather and a surge in motor vehicle sales. However, consumer spending has outpaced disposable income by a wide margin over the last few quarters, suggesting the recent pace will be difficult to sustain. In fact, personal spending slowed in March, rising 0.3%, the Commerce Department said, just under the 0.4% growth forecast by economists in a Dow Jones Newswires poll.

Earnings season is in full swing, and so far, the news has been generally good. Of the 300 companies in the S&P 500 that have reported first-quarter earnings, some 70% have beaten analysts’ estimates, according to S&P Capital IQ. Profit margins also seem to be holding up.

Overseas, concerns grew about weakness in Spain’s economy, which contracted for the second consecutive quarter – the technical definition of a recession. The credit ratings of Spanish banks were downgraded Monday, and Standard & Poor’s lowered Spain’s debt rating by two notches last week. Fears that weakness in the Eurozone could spill over to the U.S. helped derail the market’s advance in 2010 and 2011, so investors are watching this area closely.

Going forward, the April jobs report – due out Friday, May 4 – will give some indication as to the direction of employment growth, which is crucial to the continuation of consumer spending. The weeks ahead also will provide a clearer indication as to whether corporate profits, a key driver of stock prices, will remain robust.

After rising roughly 25% since last October, stocks have reached levels well ahead of what many market analysts had predicted. While that alone may not be a reason to make any changes in your portfolio, it’s also a situation that bears watching. If you’d like to discuss that – or have any other questions or concerns – please give us a call.

Investing involves risk, and investors may incur a profit or a loss. Past performance is not an indication of future results. Investors cannot invest directly in an index. The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The performance noted does not include fees or charges, which would reduce an investor’s returns.

Compliance approval M12-1588

Tags: 2012, Market Outlook, Professionally Speaking, Raymond James
Posted in Market Commentary | Comments Off

Stocks continue gains with Dow closing above 13,000

Monday, March 5th, 2012

Stocks continued their gains in February with the Dow Jones Industrial Average closing above the psychologically important level of 13,000 on February 28^th – the first time since May 20, 2008. The Dow slipped below the milestone on Leap Day, but still increased 2.53% for the month to close at 12,952.10. Broader averages followed suit, with the tech-heavy Nasdaq hitting 3,000 for the first time since December 2000 and increasing 5.44% during the month. The S&P 500 also advanced 4.06%.

	2/29/2012 Close	1/31/2012 Close	Change	Gain
DJIA	12,952.10	12,632.91	319.19	2.53%
NASDAQ	2,966.89	2,813.84	153.05	5.44%
S&P 500	1,365.68	1,312.41	53.27	4.06%

Since October 2011, investor confidence has risen alongside strengthening corporate profits and improvements in leading economic indicators — including jobless claims and the Institute for Supply Management (ISM) index. According to the Conference Board its consumer confidence index rose to 70.8 in February, well above the January reading of 61.5.

Contrary to positive sentiment, orders for durable goods in January declined by almost 4% to $206 billion, according to the Commerce Department — the biggest drop since January 2009. In addition, the Standard & Poor’s Case-Shiller Home Price Index cast new doubt on the housing market. The national composite for housing prices declined 3.8% during the fourth quarter of 2011 and 4.0% versus the fourth quarter of 2010.

On the European front, the 130 billion euro ($174 billion) second bailout package for Greece was finally approved. While the outcome for Greece and whether or not it will eventually default remains uncertain, the package is perceived to have more benefit than risk and will require the country to cut 3.2 billion euro from its budget. Today, the European Central Bank launched its second three-year long-term-refinancing operation to further ease balance sheet pressure. Banks are expected to take another 530 billion euros ($713 billion) in addition to the 500 billion euros borrowed in December.

With the Dow hitting 13,000 and the likes of Apple trading at a record high, investors want to know if stocks can move higher. While no one knows, historical comparisons are sometimes informative. Let’s look at the S&P 500 in 2011. The average started the year with similar momentum and peaked in April at 1,337 (more than a 6% increase). By the end of 2011, the S&P was down 1.1% after a fairly volatile late summer run. That said, stocks are trading at a 14% discount to their average price-earnings ratio over the past five decades, according to Bloomberg calculations, and equities certainly look appealing. Against this, of course, are fears about possible contagion from ongoing problems in the Eurozone, the U.S. budget deficit, rising energy prices and the ripple effects of a China slowdown. As always, only time will tell.

While a development like the Dow reaching the 13,000-level is welcome, investors should remain watchful of the many issues that generated volatility in 2011 and the newly mounting concerns like China that may tip the scale further. A carefully considered long-term strategy is the key. If you have any questions or concerns about your portfolio holdings, or your overall financial plan, please call us.

Tags: 2012, DOW, Market Outlook, S&P 500, trends
Posted in Market Commentary | Comments Off

Stocks Post Strongest January Since 1997

Thursday, February 9th, 2012

Stocks staged their strongest January advance in 15 years despite absorbing negative news on the month’s last day of trading. Although the broad averages were little changed Tuesday, the S&P 500 has now rallied more than 200 points since its low point last October as investors have gained confidence in the domestic economy’s halting but nonetheless upward path.

Broad market averages had been well ahead early in the session after members of the European Union agreed to move closer to fiscal union and also approved a permanent bailout fund for the Eurozone. In addition, negotiations between Greece and its private creditors over a debt restructuring appeared to be moving toward an agreement. However, investors turned cautious after the Conference Board said its index of consumer confidence declined to 61.1 in January from a revised 64.8 in December. The new level was well below the 68.0 reading generally expected by economists. Adding to concerns was news that U.S. home prices fell again in November, according to the Standard & Poor’s Case-Shiller home-price indexes.

Despite a mixed session at month’s end (the Dow Jones Industrials declined 20.81, or 0.16%; the S&P 500 fell 0.61, or 0.05%; and the Nasdaq advanced 1.90, or 0.07%. equities finished January with robust gains.

	1/31/12 Close	12/30/11 Close	Change	Gain/Loss
DJIA	12,632.90	12,217.56	+415.34	+3.40%
NASDAQ	2,813.84	2,605.15	+208.69	+8.01%
S&P 500	1,312.40	1,257.60	+54.80	+4.36%

Shareholders were upbeat last week when the Federal Reserve Board said it planned to keep short-term interest rates at exceptionally low levels “at least through late 2014” and also signaled that the central bank may restart a bond-buying program meant to push down long-term rates. The Fed previously had said short-term rates would stay near zero at least until mid-2013. The Fed also adopted a specific inflation target – a 2.0% annual rate in the PCE Price Index, which is similar to the CPI, but adjusts for changing patterns of consumption – and reaffirmed its dual mandate of controlling prices while also achieving maximum sustainable employment. Fed officials have indicated that they believe the appropriate unemployment rate target is currently between 5.2% and 6.0% – higher than it was before the financial crisis.

The behavior of equities in January is closely monitored by market watchers seeking indications of how stocks will perform for the full year. However, a first-month rally does not always hold the promise of later gains. Last year, for example, the S&P 500 advanced more than 2% in January but finished 2011 essentially unchanged.

While a strong start to the year is certainly welcome, investors must remain vigilant as 2012 unfolds since many of the issues that generated volatility last year remain unresolved. As always, a carefully considered long-term strategy is the key. Please feel free to contact us with questions or concerns about your financial plan.

Investing involves risk, and investors may incur a profit or a loss. Past performance is not an indication of future results. Investors cannot invest directly in an index. The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. International investing involves additional risks such as currency fluctuations, differing financial accounting standards, and possible political and economic instability.

(Compliance approval M12-0828)

Tags: 2012, Interest Rates, january, markets, S&P 500
Posted in Market Commentary | Comments Off

Markets Tumble on Signs of Weakening Global, U.S. Economies

Friday, August 5th, 2011

Stocks fell sharply yesterday around the world, accelerating a widespread decline that began as the United States approached the August 2 deadline for averting default and then resumed with even more intensity after a brief rally when a debt/budget deal was reached in Washington. On Thursday, the Dow Jones Industrial Average fell 512.76, or 4.31%, while the broader S&P 500 dropped 60.27, or 4.78%, and the tech-oriented Nasdaq declined 136.68, or 5.67%.

At today’s close of 1,200.07, the S&P 500 has now slumped almost 12% from its April 29 closing high of 1,360.14, putting the market into what Wall Street considers a “correction” – generally defined as a pullback of 10% to 20% (declines greater than 20% are considered bear markets). For perspective, the market experienced a 16% correction in the summer of 2010 before rebounding after Fed Chairman Ben Bernanke announced the monetary stimulus policy widely referred to as QE2.

Although investors were cheered that the U.S. did not default, their focus quickly moved on to intensifying concerns that leaders both here and abroad have not done enough to address weakening economic growth both in the U.S. and globally. In the U.S., recent economic reports have raised fears that the U.S. economy might be in danger of tipping over into a recession. In Europe, a second major rescue package for Greece did not reassure investors, who have begun to focus on the debt problems confronting the much larger and more important economies of Italy and Spain. Investors there drove British stocks down 3.4%, while in Germany, the DAX index dropped 3.4% and in France, the CAC 40 closed down 3.9%.

Today’s action shows that investors are fleeing so-called “risk assets” such as stocks in favor of other asset classes they perceive as safer. Upcoming reports on U.S. employment and other economic trends will play a large role in determining whether investors can regain their confidence in the near-term.

For additional insights on the current economic situation, check out the most recent edition of Professionally Speaking featuring Raymond James Chief Economist Scott Browth, PH.D. You can access this audio presentation by visiting http://marvinellis.com/event.php?id=24&e=captainslog.

We want to assure you that we are following the markets closely and will of course continue to do so. While declines of this nature are obviously a matter of concern, it’s also very important not to overreact. If you have any concerns about the current investment climate, please give us a call.

Compliance approval M11-1672

Tags: 2011, Market Outlook
Posted in Market Commentary | Comments Off

Last-Minute Debt Deal Overshadowed by Economic Concerns

Tuesday, August 2nd, 2011

The good news is we have a debt deal in place. After weeks of political back-and-forth, a compromise was finally brokered between the House and Senate and quickly signed into law by President Barack Obama. The new bill raises the government’s capacity to borrow and cuts spending, avoiding possible defaults by the U.S. government.

Specifically, the bi-partisan deal put into place provisions to raise the country’s $14.29 trillion cap on borrowing and cut the budget deficit by at least $2.1 trillion over the next decade.

The bill also:

Establishes a procedure to increase the debt limit by $400 billion initially and procedures that would allow the limit to be raised further for a cumulative increase of between $2.1 trillion and $2.4 trillion.

Requires that the House of Representatives and the Senate vote on a joint resolution proposing a balanced budget amendment to the Constitution.

Creates a Congressional Joint Select Committee on Deficit Reduction to propose further deficit reduction, with a goal of saving at least $1.5 trillion over 10 years. If the committee cannot come up with a solution by the end of 2011, $1.2 trillion dollars will be cut – half from defense spending and half from non-defense spending (e.g., Medicare).

Changes the Pell Grant and student loan programs. For example, the bill terminates the authority to make interest subsidized loans to graduate and professional students and will eliminate direct loan repayment incentives.

But, the work, it seems, is not quite done. As the measure finally passed, world markets were down and the U.S. Dow Jones Industrials were off for an eighth day in a row. Investors were unnerved by spreading debt troubles in Europe and a decline in U.S. consumer spending to the lowest level in two years. Having a deal in place is a major step in the right direction, though. Now, legislators can return their attention to fixing the economy and creating jobs.

Given its wide scope, the real-life implications remain to be seen. Economic indicators continue to show overall weakening and the U.S. government and affiliated securities’ credit ratings remain under scrutiny by the major credit rating agencies.

Of course, we will continue to monitor the situation in the days and weeks ahead to better gauge the potential impact on investors.

In the meantime, please give us a call if you have any concerns about the current investment climate.

Compliance approval M11-1655

Tags: 2011, debt, Market Outlook
Posted in Market Commentary | Comments Off

Stocks Shrug Off Oil Worries, Post Strong February Performance

Monday, February 28th, 2011

Stocks turned in another strong monthly performance, with February’s gains extending an extraordinary bull market that has seen the S&P 500 flirt with numbers that double its 2009 low. That broad market average has risen faster than at any time in the last 75 years, taking just over 500 trading days to hit 1,343.01 on February 18 – almost 100% above its financial crisis low of 676.53 on March 9, 2009 – before retreating somewhat near the end of the month on concerns over unrest in the Middle East. Nevertheless, the S&P 500’s gain of 3.19% was the strongest February showing since 1998 for the widely followed index.

Energy stocks have been particularly strong, with the traditional safe haven of gold also rising above $1,400 an ounce and the U.S. dollar touching its lowest point since last November. Volatility in equities was evident, with stocks posting their biggest weekly loss in three months during the week ended February 25. However, the overall trend remained resolutely upward, as shown in the chart below.

	2/28/11 Close	1/31/11 Close	Change	Gain/Loss
DJIA	12,226.30	11,891.93	+334.37	+2.81%
NASDAQ	2,782.27	2,700.08	+82.19	+3.04%
S&P 500	1,327.22	1,286.12	+41.10	+3.19%

Investors had a variety of economic news to digest in February. Evidence that the recovery is still tentative came in the form of a downward revision of growth in gross domestic product, the nation’s total output of goods and services. The Commerce Department said GDP increased at an annualized rate of 2.8% in the fourth quarter of 2010, lower than its initial estimate of 3.2% but still an acceleration from previous quarters. Meanwhile, consumer spending rose less than expected in January, with Commerce reporting a 0.2% gain instead of the 0.4% that was widely forecast. Bad winter weather may have been a factor.

Consumers still appear upbeat, however. The Thomson Reuters/University of Michigan consumer-sentiment index rose to 77.5 in February, up from 74.2 in January and the highest level in three years. Separately, the Institute for Supply Management-Chicago Inc.’s business barometer – a measure of manufacturing strength – advanced to 71.2 in February, from 68.8 in January, its highest level since July 1988.

With interest rates remaining low, the economy continuing to expand and corporate profits staying strong, investors are demonstrating an appetite for equities that is thus far fuelling one of the strongest bull markets in recent memory.

Investing involves risk, and investors may incur a profit or a loss. Past performance is not an indication of future results. Investors cannot invest directly in an index. The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The performance mentioned does not include transaction costs which would reduce an investor’s return. Energy stocks generally involve greater risks.

Compliance approval M11-0714

Tags: Market Outlook
Posted in Market Commentary | Comments Off

Banking on Better Footing

Monday, January 24th, 2011

If 2010 was the year for bank failures, 2011 could shape up to be the year for bank recoveries. Another round of stress tests for the 19 largest banks could provide an added dose of confidence to regulators, investors, consumers, shareholders, and even analysts. In March, the Federal Reserve will release the results. “While there are still fundamental headwinds that the industry faces as earnings normalize over the next few years, we believe the majority of the “crisis” issues (collateralized debt obligations, subprime, asset-backed commercial paper, mortgage putbacks, etc.) are quantifiable with some degree of certainty,” says banking and financial services analyst Anthony Polini.

The struggling economy and bad loans brought down the banks in 2010. Today, however, the macro-economic outlook has improved. “People are starting to wake up to the fact that these banks have a lot of earnings power and excess capital that will be returned to shareholders going forward,” Polini says in this edition of Professionally Speaking, hosted by Larry Pugliese.

You can access this audio presentation by visiting the Raymond James website at raymondjames.com/experts/polini.htm. To listen, you may have to download and install Quick Time, Windows Media Player or Real Player. The software is free, and the download, available in the Professionally Speaking section of my/our website, should only take a few minutes.

If you would like to discuss the content of this edition of Professionally Speaking, or if you have questions about your portfolio or the markets, please feel free to contact us.

Compliance approved M11-491

Investing involve risks including the potential loss of capital. Dividends are not guaranteed and will fluctuate. Past performance may not be indicative of future results. There is no assurance the trends mentioned will continue or that forecasts discussed will be realized. The S&P 500 is an unmanaged index of 500 widely held stocks and cannot be invested in directly.

Tags: 2011, banking, Professionally Speaking
Posted in Market Commentary | Comments Off

Our View on the Markets–4th Quarter 2010

Monday, January 17th, 2011

By Marvin O. Ellis Sr. CLU
Branch Manager

We have seen a fair amount of volatility in the markets this year. The S&P started the year at 1115. It reached a peak of 1217 on April 19 and then hit its low for the year on July 2 when the S&P 500 reached 1022. The market reached a new high for the year on November 1 at 1226 but then retreated to 1180 on November 30.

For the quarter ending November 30, 2010 the S&P 500 was up 3.82% on a total return basis. For the year the S&P 500 is up 7.86% also on a total return basis. Although the market is up for the year it feels like we have been going sideways. And depending on your definition a good case can be made that we are in a sideways market because we have not experienced the robust upward movement the market makes in a normal recovery after a recession.

On September 20, the National Bureau of Economic Research (NBER) declared that the Great Recession that began in December 2007 ended a year ago in June 2009. We have been saying for over a year that the recession was over. It was nice that the NBER could finally confirm this. But for many, because of high unemployment, the sluggish economy, weakness in the housing markets, high levels of foreclosures, slower lending by the banking industry, and the high levels of state and US debt, the recession has not ended. These negatives cause fear and paralyze many from spending. Since we as consumers make up 70% of the economy when we don’t spend the economy suffers and the economy stays sluggish.

There are, however, many good signs that the economy is recovering even though slowly. 1. Christmas spending this year is up compared to last year. Consumers shopped in record numbers on Black Friday (the day after Thanksgiving) as well as on Cyber-Monday (the Monday following Thanksgiving).

2. In November GM had its Initial Public Offering (IPO) of its stock. GM had gone bankrupt in June of 2009 when the US Government had to bail them out with 50 Billion dollars. This IPO raised over 60 Billion which was 6 times what GM had expected. The stock was expected to open at 26 to 29 dollars a share. Instead it opened at $33. The Government’s 50% ownership in GM has shrunk and the US has received a good return on its investment. GM also report record sales in spite of decreasing the number of lines it has been building.

3. Bank lending standards have eased. Many individuals and corporations are finding it much easier to get loans which helps to stimulate the economy. Our Gross Domestic Product (GDP) is made up of how much we spend not how much we make. If we earn $100 and spend $95, only $95 counts toward GDP. If on the other hand we make $100 and borrow $10 and spend it all, $110 counts toward GDP.

4. Third quarter GDP numbers were revised up from 2% to 2 ½% which shows the economy is doing better than what was thought. Equipment and software spending by businesses rose greater than had first been reported.

5. Consumer spending rose 3% year over year.

6. The trailing four-week average of unemployment claims has fallen to its lowest level since August 2008 but all of these positives aren’t enough to suggest that we will have a meaningful drop in the unemployment rate.

7. Americans are paying down their debt. Debt service ratios as a % of Disposable personal income has fallen from a high of 14% in the 3 Quarter of 2007 to 11.9% at the end of September. Credit Card defaults continue to drop month after month. And Americans saving rates are the highest at 5.7% that they have been in close to 15 years.

8. The November elections, as had been predicted, brought “change” across the country. Republicans were elected in record numbers as Governors, the House saw the majority shift from Democrats to Republicans, and the Democrats lost their “filibuster proof” status in the Senate. (See our 3^rd quarter newsletter for why this is a good omen for the markets and the economy.)

9. And probably one of the biggest side effects that the tea party movement brought to Washington has been the pressure to extend the Bush Tax Cuts to everyone. This gives those who take the risks in business the incentives to hire, try new things and in the end get the economy moving faster in a positive direction. The owners of businesses all across the country have held off hiring because taking risks had become less desirable.

Fear is one of the great downward drivers in the markets. We always seem to have plenty of things to worry about or be afraid of. But lately it seems there are more than normal. Some of these include: geopolitical risk in the form of heightened conflict between North and South Korea, the European debt crisis that doesn’t seem to go away, policy tightening in China, high unemployment, an FBI-led investigation of insider trading, confusion over the implementation of the Fed’s quantitative easing, high levels of state and federal debt, fear of inflation domestically and abroad, Obama’s health care plan implementation and the weak housing markets.

But in spite of these negatives the markets have made nice gains this year. Have you noticed that the markets this year seem to shrug off these negatives compared to how they acted while our economy was going through a much softer patch just a few years ago?

Because of the fear that continues to linger from the deep recession we have all experienced, stock prices remain relative low based on Price/Earnings ratios which are in the low to mid teens. There is an excess of money in cash and extremely low paying bonds. As fear subsides with an improving economy those holding these low paying investments will lose their appetite for reduced risk and will seek better returns. As has happened in the past, when this shift takes place there will be a sudden rise in stock prices. You want to be positioned to take advantage of this rise in prices while attempting to reduce risk until it is clear this shift is underway. No one, including us, can tell when this shift will take place. Please call our office so we can help you position your assets according to your risk tolerance and time horizon.

We feel there is more risk to the upside movement in stock prices than there is to the down side. We have seen this in just the first few weeks in December.

Written for 4th Quarter 2010 Newsletter. Ad #C10-26626.

Tags: 2011, Advisor Commentary, Market Outlook, Our Recommendations
Posted in Market Commentary | Comments Off

2011 Economic Outlook

Monday, January 3rd, 2011

We are pleased to share with you the Raymond James 2011 Economic Outlook, which is now available through our website at http://marvinellis.com/event.php?id=14&e=captainslog

This look at the year ahead features informed and timely commentary from the knowledgeable professionals at Raymond James. Some of the key factors discussed include:

The overall outlook for the economy
Strategies for investors in 2011
The impact of the mid-term elections on taxes
Lessons learned from the Gulf oil spill
Challenges unique to small business recovery
The continuing drag on the housing market

We hope you will find these carefully considered observations both insightful and useful.

Please feel free to call us with any questions regarding the Raymond James 2011 Economic Outlook, your portfolio or current market conditions. We always look forward to speaking with you.

Tags: 2010, Market Outlook, Politics
Posted in Market Commentary | Comments Off

Stocks Flat, Retain Gains of Prior Months

Tuesday, November 30th, 2010

After a two-month run that took broad averages up more than 10%, stocks ended November about where they began as investors digested conflicting news – encouraging statistics about the domestic economy and corporate profits contrasted with worrisome signs that several European economies were on shaky financial ground.

On the plus side was a Commerce Department report that revised growth in the nation’s Gross Domestic Product for the third quarter to 2.5% (annualized), up from the original estimate of 2%. Commerce also said that corporate profits for the third quarter, in nominal or noninflation-adjusted terms, hit their highest levels since the government began keeping track more than 60 years ago. Since bottoming in the fourth quarter of 2008, corporate profits have grown for seven consecutive quarters, spurred by increasing productivity and, more recently, a pickup in consumer spending. Wages and salaries also rose in the third quarter, a positive omen for the important holiday shopping season.

The sideways movement of the market in November is reflected in the minor changes in the broad averages seen below.

	11/30/10 Close	10/29/10 Close	Change	Gain/Loss
DJIA	11,006.02	11,118.49	-112.47	-1.0%
NASDAQ	2,498.23	2,507.41	-9.18	-0.4%
S&P 500	1,180.55	1,183.26	-2.71	-0.2%

Offsetting this welcomed domestic news were worries that Europe’s sovereign-debt crisis, which has already engulfed Greece and Ireland, could spread to include Portugal, Italy, and Spain. As Europe’s fourth-largest economy, the problems of Spain, which include a housing market collapse and unemployment of around 20%, are of particular concern to investors. With the United Kingdom and several other countries embarking on severe austerity measures, investors fear that economic growth in the 16-nation eurozone will be minimal at best. There is also apprehension that China’s economic growth may slow as authorities there begin to raise interest rates.

Markets seldom move in straight lines for long and stocks had risen sharply since late August when Federal Reserve Board Chairman Ben Bernanke promised that the Fed would take measures to boost the U.S. economy. Investors now appear to be waiting for more clarity on developments in Europe, holiday retail sales, and tax policy decisions in Washington before making significant moves in their portfolios.

With 2011 right around the corner and the global markets sending conflicting signals about what lies ahead, this is a good time to think about whether your portfolio is properly positioned for the future. If you’d like to discuss any year-end changes that might be indicated, just give us a call.

Compliance approval M11-0253