October 8, 2010
Weekly Market Wrap: The S&P 500 index moved back to the positive side this week as the recent rally continued despite mixed economic news. The S&P gained 1.65% on the week finishing at 1,165. Oil and Gold were higher as well. Gold finished up 2.2% at $1,347 per oz. and Oil was up another 1.6% at $82.87 per barrel. The dollar continues to drop against other major world currencies to $77.26, down about 1%.
The S&P 500 finished the month of September up 8.77% and is now up 4.49% for 2010. The Dow Industrials index closed above 11,000 for the first time since May. It was one of the best September’s in market history!
On Monday the S&P 500 dropped 9 points as strong pending home sales could not offset a slight drop in factory orders and lingering European debt concerns. Tuesday brought a strong rally in the markets as the index jumped 24 points as service companies reported continued expansion. Wednesday the markets settled into a 1 point loss, holding on to most of Tuesday’s gains as the markets speculated on whether or not there will be additional fed easing of the money supply. Thursday brought reports on consumer borrowing falling once again and jobless claims hitting a three month low as the market treaded water and closed down 2. On Friday the market resumed its rally closing up 7 points despite a report of more jobs lost than expected.
The markets continue to rally despite mixed news on the economic front. The S&P is now only 52 points or 4.5% from its 2010 high of 1,217 set back in April. The economy is sputtering along but shows occasional signs of healing and growth, just enough to keep the markets moving forward. However, we still are not creating enough jobs to get people back to work and lower the unemployment rate from 9.7%.
The falling dollar has me somewhat concerned, but it can also have a positive effect on exports as it makes our good cheaper to those who purchase them overseas. As long as the fall is not too dramatic it should be OK. Definitely something to watch, however. This is also helping Gold reach new highs and feeding the gold bug fever.
Mortgage rates continue to drop. The Schwab Bank 15-year rate is now at 3.71% and the 30-year rate is at 4.25%. These rates are as of 10/8/2010 and assume no points, no origination fee and a $250,000 mortgage.
The Week at AAM (to highlight what I do for clients and how I am different than most advisors):
Some of the highlights of my last week include:
- Met with my NAPFA study group to discuss health insurance and the impact of health care reform with a Blue Cross Blue Shield manager.
- Checked out Regus office properties to consider a part-time office in downtown Grand Rapids and possibly the east side Detroit area.
- Gave blood at Holy Redeemer Parish.
- Met with a client’s tax preparer, CPA to strategize their 2010 taxes and discuss Roth Conversions.
- Attended my Chamber leads group to help build each other’s business.
- Met with a client to discuss mortgage options including having a relative use personal savings to pay off an existing mortgage and “keep it in the family”.
- Attended a Grand Re-Opening for a fellow chamber member the Bellagio Salon on 30th in Grandville.
- Last week I attended the Financial Planning Association of Michigan conference to network with colleagues and learn more about the great profession of financial planning.
- Met with many clients to review and help them take additional steps towards reaching their financial goals.
I hope you had a great week as well. Please let me know if there is ever anything I can do for you or if something has changed in your financial situation to warrant a meeting or a change of investment policy.
Ronald J. VanSurksum, CFP®
Advanced Asset Management, LLC