Weekly Update

The Markets                            The down draft continued for the first week of February as investors continued to parse the economic data for true signs of recovery. Personal income and spending increased slightly in December which was a positive but the growth was not enough to dispel concerns about the consumer contribution to the recovery. In fact, consumer credit fell again further suggesting that consumers will not be contributing significantly to the recovery any time soon. Finally, unemployment dropped below 10% in the latest report, but investors noted the significant increase in discouraged workers underlying the drop.   Market/Index 2009 Close Prior Week As of 02/06/10 Week Change YTD Change DJIA 10428.05 10067.33 10012.23 (0.55)% (3.99)% S&P 500 1115.10 1073.87 1066.19 (0.72)% (4.39)% MSCI World 1168.47 1119.64 1095.48 (2.15)% (6.25)% Russell 2000 625.39 602.04 592.98 (1.50)% (6.38)% Fed. Funds .25% .25% .25% 0 bps 0 bps 10-year Treasuries 3.84% 3.61 3.59 (2) bps (25) bps Last Week's Headlines ·         Personal income and spending increased in December. Personal income was slightly above expectations while spending was slightly below expectations. ·         Construction spending declined more than expected. ·         Initial jobless claims increased more than expected. ·         Unemployment declined to 9.7% which was better than expected but the number of discouraged workers (not counted as unemployed) surged.   Upcoming Items of Interest ·         The coming week brings an update on Wholesale inventories (Tuesday), January Treasury budget (Thursday), January retail sales (Thursday), Business inventories (Friday) and the Michigan consumer sentiment index (Friday). Of course, we’ll have the on-going issues with Greece and the potential impact of a default or bail-out on the European Union and the Euro.    Data source: 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. Headlines and upcoming items of interest are pulled from published reports of Vanguard, Briefing.com and Reuters. 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 MSCI World Index is a free-float adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets.