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MARKET WEEK: JUNE 13, 2011

June 13, 2011

John Jastremski Presents:

 

MARKET WEEK: JUNE 13, 2011

 

The MarketsAnother painful week, capped off by Friday’s 172-point drop in the Dow, extended equities’ slow, steady slide. Over the last six weeks, the S&P has fallen 6.8%, while the Dow is down 6.7%. The Nasdaq and Russell 2000 have fared even worse, losing almost 8% and 10% respectively since the beginning of May; along with the Global Dow, both have now given up all their year-to-date gains. Meanwhile, the yield on 10-year Treasuries remained under 3%.
Market/Index 2010 Close Prior Week As of 6/10 Week Change YTD Change
DJIA 11577.51 12151.26 11951.91 -1.64% 3.23%
NASDAQ 2652.87 2732.78 2643.73 -3.26% -.34%
S&P 500 1257.64 1300.16 1270.98 -2.24% 1.06%
Russell 2000 783.65 808.13 779.54 -3.54% -.52%
Global Dow 2087.44 2121.55 2071.09 -2.38% -.78%
Fed. Funds .25% .25% .25% 0 bps 0 bps
10-year Treasuries 3.30% 2.99% 2.99% 0 bps 31 bps

Last Week’s Headlines

  • Consumer debt rose in April at an annualized rate of 3.1%, according to the Federal Reserve. The increase was the seventh consecutive monthly increase, and was primarily the result of higher non-revolving credit such as car, student, and personal loans rather than credit card debt, which fell during the month.
  • Four of the Federal Reserve’s twelve districts reported slowing economic growth over the last two months, but the rest saw continuing moderate expansion; the Dallas region even recorded accelerating growth, according to the Fed’s “beige book” report. However, in the “no surprises here” department, real estate and oil prices continued to be a problem nationwide.
  • OPEC members failed to reach an agreement on whether to increase oil production to compensate for the Libyan conflict’s impact on that country’s oil output. However, Saudi Arabia reportedly said it would increase its production to ensure adequate global supplies.
  • The U.S. trade deficit fell to its lowest level of the year in April, according to the Bureau of Economic Analysis. Reduced demand for oil–the result of higher prices and a weaker economy–coupled with supply-chain disruptions caused by Japan’s multiple disasters cut imports, while exports increased. The combination cut the trade deficit to $43.7 billion from $46.8 billion in March.
  • As the U.S. continued to live on borrowed time with regard to its debt ceiling, Fitch Ratings warned that the nation’s debt would be put on watch for a downgrade if the issue isn’t resolved by early August.

Eye on the Week Ahead

Inflation numbers will be closely watched, while retail sales will suggest the consumer’s willingness to spend. The quarterly options expiration at week’s end could bring volatility.

Key dates and data releases: wholesale inflation, retail sales (6/14); consumer inflation, industrial production, international capital flows (6/15); housing starts (6/16); quadruple witching options expiration, leading economic indicators (6/17).

Data source: Includes data provided by Brounes & Associates. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. Equities data reflect price change, not total return.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment.

This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of John Jastremski, Jeremy Keating, Erik J Larsen, Frank Esposito, Patrick Ray, Robert Welsch, Michael Reese, Brent Wolf, Andy Starostecki and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer 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. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com,  access.att.com, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

John Jastremski is a Representative with FSC Securities and may be reached at http://www.theretirementgroup.com.

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