Weekly Update

Market Week: September 8, 2009

The Markets September--historically the cruelest month for the equity markets--ran true to form on its first day with last Tuesday's resounding 186-point thud in the Dow and 2.21% drop in the S&P 500 (worse than the S&P's 1.3% average historical loss for the entire month of September). However, the indexes managed to claw at least part of the way back up during the remainder of the week. The spot gold price shot up almost 4% during the week. Market/Index 2008 Close Prior Week As of 9/4/09 Week Change YTD Change DJIA 8776.39 9544.20 9441.27 -1.08% 7.58% NASDAQ 1577.03 2028.77 2018.78 -.49% 28.01% S&P 500 903.25 1028.93 1016.40 -1.22% 12.53% Russell 2000 499.45 579.86 570.50 -1.61% 14.23% Global Dow 1526.21 1841.91 1808.54 -1.81% 18.5% Fed. Funds .25% .25% .25% 0 bps 0 bps 10-year Treasuries 2.24% 3.45% 3.44% -1 bps 120 bps Last Week's Headlines For the first time in 18 months, U.S. manufacturing activity in August hit a number--52.9%--that indicates expansion rather than contraction. Eleven of the 18 industries measured by the index reported growth. Driven by the need to restock depleted inventories, the new orders index at 64.9% was the highest it's been since December 2004. Service industries contracted again in August, but were less than 2 percentage points from the crucial 50% threshold for official expansion. August was the 20th straight month of job losses as the unemployment rate rose to 9.7%--the highest level since 1983--from July's 9.4%. Including people working part-time involuntarily and those who have given up looking for jobs, the unemployment rate was 16.8%. However, the 216,000 drop in nonfarm payrolls was the lowest number of jobs lost in a month since last August, and better than July's 276,000 jobs lost. U.S. companies got more out of their employees in 2009's second quarter as productivity increased at an annual rate of 6.6%. Hourly compensation was up slightly, but labor costs fell at an annualized 5.9%--not surprising given the 7.6% annualized decline in hours worked (one result of all those layoffs). New orders for manufactured goods rose 1.3% in July--the fifth increase in six months. Much of the gain was powered by the 5.1% increase in new orders for aircraft and other durable goods. However, excluding aircraft and other transportation-related items, new orders fell 0.7%. The head of the International Monetary Fund (IMF) urged world leaders not to end their various economic stimulus efforts prematurely, saying they should "err on the side of caution." Eye on the Week Ahead The holiday-abbreviated week ahead is light on new economic data. However, now that Labor Day has brought summer to its unofficial end, trading volume may begin to increase. That could bring greater clarity about the future direction of the equity indexes. News articles leading up to the following week's September 15 one-year anniversary of the Lehman Bros. bankruptcy, which helped send the markets into a tailspin, might also start to affect investors' psyches. Key data releases: Consumer credit (9/8); balance of trade (9/10); consumer sentiment, Treasury budget (9/11). 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.