1. Hyre Weekly Commentary
April 16, 2012
The Markets
It‟s back. Volatility, that is.
Like a yo-yo, the market bounced around and the S&P 500 index ultimately ended down 2.0
percent for the week and 3.4 percent from this year‟s closing high, according to Reuters. Despite
the drop, the market is still showing a solid 9.0 percent gain for the year.
Once again, debt issues in Europe made headlines as Spain became the latest problem country.
That, along with some disappointing economic growth data from China, helped spark the volatile
week. Because of its massive size, any slowdown in China is closely watched by market
participants.
As a sign of the big swings this week, the Dow Jones Industrial closed the day up or down by at
least 100 points on four out of the five days last week, according to Barron‟s.
Highlights from the week included:
China‟s economy expanded at the weakest pace in over three years last quarter, missing
consensus economic forecasts.
Yields on debt in Spain jumped due to a weak debt auction, renewing fears that the
European debt crisis could start affecting the global markets again.
Several U.S. banks reported earnings that underwhelmed investors, resulting in weakness
in financial stocks.
U.S. inflation remained under control which may leave open the possibility for further
Federal Reserve intervention should economic data deteriorate.
Sources: The Wall Street Journal, Yahoo! Finance
The quarterly corporate earnings season is now underway so we wouldn‟t be surprised to see
more market volatility as investors digest the latest read on the health of corporate America.
2. Data as of 4/13/12 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor's 500 (Domestic Stocks) -2.0% 9.0% 3.8% 16.9% -1.2% 2.1%
DJ Global ex US (Foreign Stocks) -1.0 7.4 -13.8 12.5 -5.1 5.1
10-year Treasury Note (Yield Only) 2.0 N/A 3.5 2.9 4.8 5.1
Gold (per ounce) 2.2 5.8 14.3 23.4 19.6 18.7
DJ-UBS Commodity Index -1.6 -0.9 -17.7 7.2 -4.4 3.8
DJ Equity All REIT TR Index -1.2 8.0 11.2 31.7 -0.7 9.5
Notes: S&P 500, DJ Global ex US, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend)
and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the
three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the
historical time periods.
Sources: Yahoo! Finance, Barron‟s, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not
applicable.
THE “SHOVE IT” INDICATOR as highlighted by CNBC made a noteworthy gain in
February suggesting consumer confidence may be increasing. You‟re probably wondering,
“What in the world is the „shove it‟ indicator?” Well, every month the government conducts a
Job Openings and Labor Turnover Survey, or “JOLTS” for short. One of the data points in the
JOLTS report is the number of workers who quit their job as opposed to being laid off. And, in
February, for the first time since September 2008, the quitters were in the majority.
What does this mean? Generally speaking, people who quit their job are typically more confident
that there is another job waiting for them when they voluntarily leave a position. Nicholas Colas,
chief market strategist at ConvergEx Group says, “Quits go hand-in-hand with consumer
confidence.”
This positive JOLTS data point follows a disappointing government jobs report for the month of
March where only 120,000 new jobs were created. Also, the preliminary March reading of the
University of Michigan‟s consumer confidence survey showed a decline from the previous
month. Analysts had expected confidence to stay flat, according to International Business Times.
This conflicting economic data gave the bulls and the bears ample ammunition to bolster their
respective case. And, conflicting data like this may lead to a continuation of the yo-yo as
investors try to predict which direction the economy is headed.
Weekly Focus – Think About It
“Expectation is the root of all heartache.”
--William Shakespeare
Best regards,
Jim Hyre, CFP®
Registered Principal
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Securities offered through Raymond James Financial Services, Inc., Member FINRA/SIPC.
* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in
general.
* The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks.
* The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the
National Association of Securities Dealers Automated Quotation System.
* Gold represents the London afternoon gold price fix as reported by www.usagold.com.
* The DJ/AIG Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The
Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen
as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment
Trust (REIT) industry as calculated by Dow Jones
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future
performance.
* Consult your financial professional before making any investment decision.
* You cannot invest directly in an index.
* Past performance does not guarantee future results. mc101507
* This newsletter was prepared by PEAK for use by James Hyre, CFP®, registered principal
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Jim Hyre, CFP®
Registered Principal
Raymond James Financial Services, Inc.
Member FINRA/SIPC
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