Last week we continued to see global markets fall as concerns about the implications of political uncertainty in Greece persisted. The major equity averages drop in excess of 1% -- this time taking the S&P 500 within a few points of its March low. The price of a barrel of crude oil retreated from above $100 to below $97 on signs of economic slowing as well as an increase in supply among oil-producing countries and the easing of tensions over Iran.
Returns to 5/11/12
One Week
YTD
One Year
Three Year
Five Year
Dow Jones Industrial
-1.50
5.97
4.31
18.26
2.01
NASDAQ Composite
-0.76
12.62
3.12
19.22
2.75
Standard & Poor's 500
-1.06
8.44
3.07
16.59
0.04
MSCI EAFE (Internl.)
-2.42
3.29
-14.63
7.60
-5.65
Source: Morningstar.com. * Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. 3 and 5-year returns are annualized.
ARE YOU CONCERNED ABOUT THE MARKETS AND YOUR MONEY? We have witnessed some of the worst global market volatility in history. When fear takes over a market, thoughtful investors should review the facts. We are long-term investors and even though this market has seen historical volatility and recession, it is the long-term fundamentals that will emerge and win out in the long run. Remember, "In uncertain times, stay informed and diversified." If you are concerned! You should contact us to schedule a review of your portfolio related to your own situation.
U.S. Economic News
Institute for Supply Management reported that manufacturing purchasers forecast a 4.5% revenue gain for the rest of the 2012, slower than the full-year increase in 2011. However, nonmanufacturing purchasers expect a 4.8% increase in revenues for the remainder of the year, well higher than the 1.5% gain last year.
Home Prices increased in March, marking the first time since last July that prices turned in a monthly gain, and prices are expected to become more stable in the next few months.
Import Prices declined 0.5% in April, compared with a 1.5% rise the previous month, the Labor Department said Thursday. It was the first decline in prices since October and the biggest decline since June.
New Jobless Claims declined by 1,000 to a seasonally adjusted 367,000 in the week ended May 5, the Labor Department said Thursday. The previous week's figure was revised downward to account for seasonal factors.
U.S. Trade Deficit widened in March, with a wave of oil imports and Chinese goods proving enough to overwhelm record-high exports. The U.S. deficit in international trade of goods and services ballooned 14.1% to $51.83 billion from a downwardly revised $45.42 billion the month before, the Commerce Department said Thursday. The February trade gap was originally reported as $46.03 billion.
Other Interesting Info and Events
Social network Facebook took to the road to drum up interest in its mammoth and much-anticipated initial public offering next Friday, May 18, with 27-year-old founder Mark Zuckerberg wearing his trademark hoodie and sneakers. Large crowds gathered in New York City and Boston to hear Facebook’s pitch. Facebook seeks to raise $10 billion, easily surpassing Google's IPO. Its estimated $96 billion market capitalization would rival that of Amazon.com. The roadshow continues next week in Chicago, San Francisco, Denver and Kansas City.
Global News
France, socialist candidate Francois Hollande defeated incumbent Nicolas Sarkozy to become the country's next president. Hollande's victory was not much of a surprise following the first-round election results two weeks ago, as Sarkozy's favorable stance on austerity was unpopular among many French voters.
Greece, austerity measures were unpopular in Greek voters, as well, the previous Sunday, with the two mainstream parties--Pasok and New Democracy--losing ground in parliamentary elections to candidates from several smaller left- and right-wing parties.
China showed the country's exports increased by a less-than-expected 4.9% in April with trade surplus expanding to $18.4 billion.
Japan's trade balance for March contracted more than 98% from a year ago to 4.2 billion yen, down from 102.1 billion yen in February. Exports increased 7.3% while imports rose 11.9% during the month.
Australia’s unemployment rate fell unexpectedly last month to a one-year low.
Spain’s government announced plans to nationalize troubled financial institution Bankia. This sparked more fears in the country, causing the yield on 10-year Spanish bonds to jump higher than 6%.
What's Happening This Week?
This week will be a heavy calendar of U.S. data, including retail sales, industrial production, weekly claims and the minutes of the Fed’s last meeting. And of course, Facebook’s initial public offering is an event that has been awaited for months.
Remember, "In uncertain times, stay focused and diversified."
In any market environment, I strongly believe that investors should stay diversified across a variety of asset classes, which helps reduce risk. By working closely with your Bankers & Investors Financial Advisor, you can help ensure that your portfolio is properly diversified and that your financial plan supports your long-term goals, time horizon, and tolerance for risk. Diversification does not guarantee a profit or protect against loss. If you don't currently have an advisor or would like a second opinion, give us a call we would love to work with you.
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