AAM Weekly Market Wrap – March 28 – 2011

March 27, 2011

Weekly Market Wrap:  The equity markets bounced back this week as the S&P 500 index posted a gain of 2.7% to close back above the 1,300 at 1,313.80.  Oil surged higher once again to push well over $100per barrel and closed the week up 4.28% to $105.40.  Gold moved modestly higher by 0.63% to $1,428 per oz and the dollar rose against other major world currencies closing up 0.26% to $76.24.

Year-To-Date the major indexes are at: The S&P index 4.47%, The Dow Jones Index +5.55%, The NASDAQ +3.40%, The Russell 2000 Small cap Index + 5.13%, EAFE International +2.33%.  In the Bond market the 10 year treasury is currently yielding 3.44% and the 30 year yielding 4.41%.  Both rates are up for the week and year-to-date.

On Monday the S&P 500 surged 19 points as overseas concerns eased, AT&T made a bid to purchase T-Mobile and Citigroup reinstated its dividend.  The Dow Jones average moved back above the 12,000 mark for the first time in two weeks.  The market moved significantly higher despite lower than expected existing home sales and higher oil prices.

Tuesday’s market dropped 5 points as Middle East tensions pushed oil prices higher, European debt concerns re-emerged and South-East US manufacturing was lower than expected.

On Wednesday stocks moved slightly higher adding 4 points as higher commodity prices moved stocks higher.  Other news included new home sales hitting a record low and the Federal Reserve objected to Bank of America’s proposed dividend increase.

Stocks moved higher again on Thursday as optimistic corporate earnings guidance and lower initial jobless claims gave the market reasons to buy despite a lower than expected durable goods orders.

On Friday stocks extended their gains by an additional 4 points as the 4th Quarter GDP number was revised upward and Oracle’s quarterly numbers beat market expectations.  On the negative side consumer sentiment was down more than expected.  The Dow index has now risen 6 of the last 7 trading days.

The markets moved higher this week as much of the overseas concerns subsided and traders continued to look mainly at the positive signs of continued US economic recovery.  Positive earnings have also contributed to the recent rebound in the markets.

Volatility was only on the upside this week as the S&P 500 was up 4 of the 5 trading days.  I am continuing to watch the possible impact of higher oil prices and other inflationary pressures on the market and consumers.  I am hopeful that events in the Middle East will eventually settle down and oil prices will once again ease below the $100 per barrel mark.

Mortgage rates moved slightly higher this week.  The Schwab Bank 15-year rate is now at 4.28% and the 30-year rate is at 4.96%. These rates are as of 03/25/2011 and assume no points, no origination fee and a $250,000 conforming rate 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 two weeks include:

  • Had lunch with an attorney to keep up-to-date on anything new in estate planning.
  • Met with many existing clients to review and help them work towards their financial goals.
  • Had lunch with Michelle at GlenHaven Manor.  I learned about their facility and how they provide independent and assisted living at a pretty reasonable cost.  What a great facility!
  • Attended a Grandville Jenison Chamber luncheon event to improve my sales skills.  I also attended another Chamber luncheon to improve my “Twitter” skills as well.
  • Continued to help clients prepare for tax completion and work with their tax preparer to make sure the taxes are done right.
  • Attended the Hudsonville Little League coaches meeting to prepare for the 2011 season.  I am looking forward to coaching in the “Machine Pitch” division this year!

I hope you had a great few weeks 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

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