Weekly Update

The Markets                            Financial markets were down again for the week closing January down uniformly. While the vast majority of companies met or exceeded earnings estimates for the fourth quarter and full year 2009, many did so without demonstrating meaningful top line revenue growth. At one point, aggregate gross revenue growth, x financials, was 0%, even as net earnings growth was in low double digits. Investors appear to be shifting from emphasizing reported earnings growth to top line growth as evidence of true economic recovery. GDP reported on Friday was superficially positive at 5.7% but upon further review demonstrated that most of the growth was via inventory reduction and not from much needed corporate and consumer spending. Fasten your seatbelts!   Market/Index 2009 Close Prior Week As of 01/29/10 Week Change YTD Change DJIA 10428.05 10172.98 10067.33 (1.04)% (3.46)% S&P 500 1115.10 1091.76 1073.87 (1.64)% (3.70)% MSCI World 1168.47 1149.89 1119.64 (2.64)% (4.19)% Russell 2000 625.39 617.12 602.04 (2.44)% (4.95)% Fed. Funds .25% .25% .25% 0 bps 0 bps 10-year Treasuries 3.84% 3.62 3.61 (1) bps (23) bps Last Week's Headlines ·         On Wednesday, the FOMC stated it would continue to maintain the Fed Funds rate at 0.25% for an “extended period”. ·         GDP grew at 5.7% annualized for the fourth quarter of 2009. ·         Durable-goods order increased (positive) but less than expected (negative). ·         Both existing and new home sales declined for December – both declines were unexpected. ·         Consumer confidence increased slightly to its highest level since September 2008.   Upcoming Items of Interest ·         Personal Income, construction spending and manufacturing activity all reported on Monday, the ISM non-manufacturing report on Wednesday, productivity and factory orders on Thursday and employment and consumer credit on Friday. We’ll also hear from the White House regarding the 2011 Federal budget. Expect continued coverage of the financial crisis in Greece and its effect on the European Union.    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.