AAM Weekly Market Update – October 17 2011

Weekly Market Wrap: Stocks surged for the second week in a row as
3rd Quarter earnings season kicks off and Euro-concerns ease once
again.  The S&P 500 index added 6% to
close at 1,224.58.  Oil and Gold moved
higher as well.  Gold was up 2.58% to
close at $1,680.65 per oz. and Oil added 5.25% to $87.19 per barrel.  The dollar was lower by 2.5% against other
major world currencies at $76.75.

Year-To-Date for the major indexes: The S&P index
-2.63%, The Dow Jones Index +0.58, The NASDAQ +0.56%, The Russell 2000 Small cap
Index -9.08%, EAFE International -11.74%.
The 10 year treasury is currently yielding 2.23% and the 30 year is
yielding 3.21%.  Both yields are higher for
the week and lower the year.

On Monday the S&P 500 index added 39 points on light volume
as Germany and France pledged to fix the Euro-debt problem and the start of 3Q
earnings season tomorrow.  Monday was the
anniversary of the top of the S&P 500 rally at 1,565 four year ago.  The index is currently down almost 24% from
that level but it is up 70% from the bottom of the market on March 9,
2009.

Tuesday the index added 1 point on light volume as the
Eurozone bailout vote was delayed, small business optimism was slightly
positive and 3Q earnings season kicked off slowly.

Wednesday the market added 12 points on moderate volume as
it appeared the Eurozone will get the votes needed for the latest bailout plan,
Fed policy appears to be split on what to do
for the economy and mortgage applications were higher.

Thursday stocks dropped 4 points on light volume as the
Eurozone bailout was approved, China exports were down and US jobless claims
and trade deficit data were mostly in-line with expectations.

Friday the market added 21 points on light volume to finish
off a second week of gains despite a downgrade of Spain debt.  Also, 3rd Quarter earnings got a
boost from Google and consumer sentiment was lower.

It was a good week in the market but not a lot of conviction.  Stocks were higher but on very low volume
this week.  I’ll feel better about where
we are headed if we can make another move like this on heavy volume.

The Dow and Nasdaq index’s pushed back into positive territory
this week.  Small cap stocks and
International stocks continue to underperform this year.

Mortgage rates were flat this week.  The Schwab Bank 15-year rate is now at 3.81%
and the 30-year rate is at 4.44%. These rates are as of 10/14/2011 and assume
no points, no origination fee and a $250,000 conforming rate mortgage.

 

What to watch for on the economic calendar this week:

Monday– Empire state manufacturing / Industrial Production

Tuesday – Producer Price Index / Housing Market Index

Wednesday – Consumer Price Index / Housing Starts

Thursday –Weekly Jobless Claims / Existing Home Sales / Philly Fed Survey

Friday – None

 

 

Ronald J. VanSurksum, CFP®

Advanced Asset Management, LLC

October 17, 2011

 

 

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