Weekly Market Wrap: Stocks gained for their 4^th straight
week and 5 of the last 7 as Europe makes a debt deal and the US GDP grows
faster than expected for the 3^rd quarter.  The S&P index surged 3.78% on the week to
close at 1,285.08.  Commodities surged as
well.  Oil gained 7% to close at $93.54 per
barrel and Gold added 6.45% to finish at $1,745.29 per oz.  The Dollar was lower on the week against
other major world currencies down 1.69% to $75.03.

Year-To-Date for the major indexes: The S&P index
+2.18%, The Dow Jones Index +5.65, The NASDAQ 3.18%, The Russell 2000 Small cap
Index -2.89%, EAFE International -5.88%.
The 10 year treasury is currently yielding 2.31% and the 30 year is
yielding 3.35%.  Yields are higher for
the week and lower for the year.

On Monday the S&P 500 index added 16 points on economic
optimism, good signs on a deal in Europe and positive earnings.  China manufacturing broke a 3-month slump and
Japan exports increased.

Tuesday the index dropped 25 points as a Europe debt deal hit
a snag, earnings new disappointed and consumer confidence tumbled.

Wednesday the market added back 13 points as durable goods
orders, new home sales and mortgages beat expectations.

Thursday stocks surged 43 points on an agreement in Europe
on a new Greek bailout plan and US 3Q GDP beat expectations at 2.5%.

Friday the market was flat on moderate volume as personal
income was weaker than expected in September but lower employment costs
tempered inflation concerns and consumer sentiment was revised higher.

 

 

Stocks rallied again this week as a Euro-bailout decision was
reached and economic numbers out of the US continued to slowly improve.  World growth concerns were also eased a bit
as China and Japan contributed to a slightly more positive outlook.

I am glad that Europe has come to some type of agreement on the
Greek bailout.  It appears as though
Greek debt owners are going to lose about 50% of the value of their bonds and
Greece will get some additional funds to support this debt.  However, there are few details on exactly
where these funds are going to come from.
I am hopeful that this is more than just a band-aide on a much larger
problem.

Next it is the US’s turn for a little austerity as the special
group of legislatures meet to figure out how to start to get the US back
towards some type of fiscally responsible budget with a deadline of
late-November.

Mortgage rates were flat this week.  The Schwab Bank 15-year rate is now at 3.625%
and the 30-year rate is at 4.28%. These rates are as of 10/28/2011 and assume
no points, no origination fee and a $250,000 conforming rate mortgage.

 

What to watch for on the economic calendar next week:

Monday – No major releases

Tuesday – ISM Manufacturing Index / FOMC Meeting begins

Wednesday – ADP Employment Report / FOMC Meeting announcement

Thursday –Weekly Jobless Claims / Productivity & Costs / Factory Orders /
ISM non-Mfg Index

Friday – Employment Situation

 

 

Ronald J. VanSurksum, CFP®

Advanced Asset Management, LLC

October 31, 2011