October 16, 2010
Weekly Market Wrap: The S&P 500 Index continued its positive ways and posting its third gain in the last four weeks. The index was up almost 1% to close at 1,176. Gold was positive again as well closing up 1.5% to $1,368 per oz. Oil was lower on the week by 1.7% closing at $81.45 per barrel and the dollar was slightly lower against other major world currencies at $76.99.
The S&P 500 is now up almost 5.5% for 2010.
Monday the market was flat with very little economic news and the anticipation of the fed meeting on Tuesday. The market moved slightly higher on Tuesday, up 4 points, as the fed minutes were released and they continued to show a bias for more stimulus. Wednesday the index was up another 8 points on positive earnings news. Thursday brought a loss of 4 points as a surprising increase in initial jobless claims and worries over bank foreclosure practices scared away some buyers of stocks. Friday’s market moved up 2 points as retail sales beat forecasts, inflation was tame but consumer sentiment dropped.
Foreclosure issues reared their head once again as it was discovered that many banks were not handling the process properly and were using automated services, rather than people to process claims resulting in more homes in foreclosure than should have been. Bank stocks took a hit this week as this could halt the sales of foreclosure properties until this is resolved leaving the banks with properties they do not want and no way to sell them. The silver lining to this problem could be with the individuals selling their homes not in foreclosure. People may not want to buy a foreclosure house if it cannot be determined whether or not a home really should be in foreclosure.
The other big story this week is no inflation adjustment again in 2011 for individuals receiving social security benefits. This is two years of no cost-of-living adjustments after a large adjustment in 2009.
Mortgage rates steadied and rose slightly this week. The Schwab Bank 15-year rate is now at 3.81% and the 30-year rate is at 4.33%. These rates are as of 10/15/2010 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:
- Mary (my assistant) drove a client from her new home to a mortgage closing so that she could finish the process of selling her home after her move into an assisted living facility.
- Met with a member of my referral leads group to learn more about how her company helps with restoration services after an accident or disaster. Let me know if you ever need that kind of help!
- Met with 4 new prospects and gained one new client with hopefully more to come!
- Helped a client who recently retired plan to pay off some debts in the most tax efficient manner and start the rollover process of her retirement plan. It’s vital to pay attention to cash flow and tax planning after retirement.
- Attended a chamber luncheon and met many new local business owners and service providers for additional networking.
- Referred another client to have their mortgage reviewed and possibly refinanced.
- Helped a business owner client to terminate an existing retirement plan to start up a new “simple” retirement plan in January that will better meet his needs.
- Looking forward watching the kids play a soccer game and a football game today!
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