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WEEKLY ECONOMIC UPDATE

January 3, 2012

John Jastremski Presents:

WEEKLY ECONOMIC UPDATE

January 2, 2012

STOCKS IN 2011: DJIA +5.5%, S&P 500 ENDS FLAT

The Dow Jones Industrial Average bucked a global trend and advanced in 2011. The index rose 11.95% in the fourth quarter, a move that separated it from a pack of overseas benchmarks that finished the year with double-digit percentage losses. In terms of price return, the S&P 500 recorded its smallest annual change since 1947 (see below). The S&P’s total return for 2011 was +2.11%. With all the fears about Europe and the Federal Reserve keeping interest rates incredibly low, long-term Treasuries had their best year since 2008 with a total return of 33%.1,2,3

CONSUMER CONFIDENCE BAROMETER RISES

The Conference Board’s index of consumer confidence saw a big jump north in December, soaring 9.3 points to 64.5. Economists surveyed by Reuters had expected it to come in at 58.3.4

HOME SALE PRICES DOWN, HOME SALE CONTRACTS UP

The good news? The National Association of Realtors said its pending home sales index reached a 19-month peak in November, moving to 100.1 for a 5.9% annual gain. The bad news? The October edition of the S&P/Case-Shiller Home Price Index slipped 1.2% from its September level.4,5

HIGHS & LOWS IN KEY COMMODITIES FOR 2011

Gold lost 10.48% for the month but went +10.23% for the year, in contrast to copper (-22.73%) and silver (-9.77%). Crude oil advanced 8.15% in 2011, while retail gas prices rose 6.41%. Notable yearly dives were made by natural gas (-32.15%) and cotton (-36.69%). The U.S. Dollar Index gained 1.56% on the year.2

A MINOR RETREAT TO END THE YEAR

All three major U.S. stock indices lost ground in the last trading week of 2011. The four-day performances across December 27-30: DJIA, -0.62% to 12,217.56; NASDAQ, -0.52% to 2,605.15; S&P 500, -0.61% to 1,257.60.1,6

THIS WEEK

The NYSE is closed Monday in celebration of the New Year’s Day holiday. Tuesday, the ISM manufacturing index for December is released, plus the most recent FOMC minutes. No major economic releases are scheduled on Wednesday. On Thursday, Monsanto, Amgen and Family Dollar announce earnings, ISM issues its December service sector PMI and new initial claims figures arrive. Friday brings the December jobs report from the Labor Department.

%   CHANGE

2011

1-YR   CHG

5-YR   AVG

10-YR   AVG

DJIA

+5.53

+5.53

-0.39

+2.19

NASDAQ

-1.80

-1.80

+1.57

+3.36

S&P 500

-0.003

-0.003

-2.27

+0.95

REAL YIELD

12/30   RATE

1   YR AGO

5   YRS AGO

10   YRS AGO

10 YR TIPS

-0.07%

1.08%

2.41%

3.50%

Sources: online.wsj.com, bigcharts.com, treasury.gov, treasurydirect.gov – 12/30/111,7,8,9

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

This material was prepared by Peter Montoya 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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