Weekly Update

Market Week: August 24, 2009

The Markets The equity markets staged their own V-shaped recovery last week. After Monday's plunge (prompted in part by selloffs in the Chinese stock market), they spent the rest of the week recuperating nicely--and then some. Highs for the year were everywhere you looked. The Nasdaq recaptured the 2000 mark, while the Dow closed above 9500, which it hasn't done since last year's presidential election. The S&P is now up nearly 52% from its March closing low, while the Nasdaq is up almost 60%. Market/Index 2008 Close Prior Week As of 8/21/09 Week Change YTD Change DJIA 8776.39 9321.40 9505.96 1.98% 8.31% NASDAQ 1577.03 1985.52 2020.90 1.78% 28.15% S&P 500 903.25 1004.09 1026.13 2.20% 13.60% Russell 2000 499.45 563.90 581.51 3.12% 16.43% Global Dow 1526.21 1803.83 1819.50 .87% 19.22% Fed. Funds .25% .25% .25% 0 bps 0 bps 10-year Treasuries 2.24% 3.56% 3.57% 1 bps 133 bps Last Week's Headlines The Producer Price Index, which measures wholesale prices, declined 0.9% in July, and is down 6.8% from a year ago. However, the so-called core index, which doesn't include food and energy, dropped by only 0.1%, and was 2.6% higher than last year. Housing starts, which had risen 6.5% in June, fell 1% in July, and were 37.7% lower than last July. The biggest decline--16.3%--was in the country's northeast region, while starts in the midwest actually increased almost 13%. Sales of existing homes rose in July for the fourth straight month, hitting the highest level since August 2007. The 7.2% increase was the biggest monthly jump in 23 years, according to the National Association of Realtors. However, the inventory of unsold homes also rose by 7.3%. The chief economist for the International Monetary Fund (IMF) declared the global recession is officially at an end. However, he added that actual growth and recovery will be low and slow, and that rebalancing levels of public and private spending could take years. Six of the ten leading economic indicators monitored by the Conference Board were up in July, pushing the index up 0.6% for the month. This was the index's fourth straight monthly gain. Nearly one in every eight mortgages in the country were delinquent or behind one payment during the second quarter, according to the Mortgage Bankers Association. Of that record number, one of every three were prime fixed-rate mortgages, up from one in five a year ago. Five more bank failures were announced on Friday, bringing the total number of failures this year to 81--more than three times the 24 banks that went under during all of 2008. Anticipation of economic recovery plus some dollar weakness helped push oil prices up by 6% last week to almost $74 a barrel--a high for the year. Eye on the Week Ahead More data on consumer mood, income, and spending highlight August's last week to sizzle. Investors will be watching to see whether the indexes will maintain their scorching pace or flame out. Key data releases: Home prices, consumer confidence (8/25); durable goods orders, new home sales (8/26); gross domestic product (8/27); personal income and spending (8/28). Data source: Includes data provided by Forefield, Inc. & Brounes & Associates. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment.