The Final Stretch for 2011

The Final Stretch for 2011

It looks like the stock market got a shot of holiday cheer as major U.S. indexes logged better than 3% gains last week. The Dow is now up 6% for the year, and the S&P 500 is back in positive territory. While many were calling for a so-called “Santa Clause rally,” others were concerned that fears surrounding Europe’s situation would continue to be a drag on the markets.
Last week however, Europe’s troubles were of little account as stocks rallied to their third weekly gain in four after Congress approved an extension of the payroll tax cut to ensure taxes won’t increase on January 1. In addition, tentative signs of improvement seen in government reports on personal spending, income, and housing, all helped boost equity markets last week.

What’s in store for the week ahead? With Wall Street closed for business on Monday, a number of major players on vacation, and few economic reports expected, trading volume will probably be light. Even so, there is something interesting we would like to share with you. According to the Stock Trader’s Almanac, the five trading days before January 1, and the two trading days that follow, typically generate abnormally high returns, yielding positive returns in 31 of the last 41 holiday seasons. Of course, past performance cannot be relied upon to predict future results, and other factors must be considered, but the trend is worth noting.

While many investors have already closed their books for the year, we head into the final stretch eager to end 2011 in the black. Regardless of what happens during the final four trading days of the year though, we encourage you to take comfort in knowing we will keep an eye on things for you. Again we urge you to relax and enjoy some well-deserved time with your family and friends.

Stay tuned for our annual recap due next week!

ECONOMIC CALENDAR:
Monday – U.S. Holiday Observed – Christmas Day
Tuesday – Consumer Confidence, S&P Case-Shiller HPI
Wednesday – EIA Petroleum Status Report
Thursday – Jobless Claims, Chicago PMI, Pending Home Sales

Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized.
Sources: Yahoo! Finance, MSCI Barra. Past performance is no guarantee of future results.
Indices are unmanaged and cannot be invested into directly. N/A means not available.

HEADLINES:

Gasoline rose to a six-week high after a U.S. government report that durable goods orders increased last month signaled an improving economy. Prices advanced 8% this week, capping the biggest weekly gain since March.

While some workers are worried about smaller paychecks next year, more than 1.4 million low-income earners will see their wages go up on New Year's Day. Minimum wage rates in Arizona, Colorado, Florida, Montana, Ohio, Oregon, Vermont, and Washington will rise between 28 and 37 cents per hour on January 1, thanks to state laws requiring that minimum wage keeps pace with inflation.

The total value of Americans' retirement assets stood at $17 trillion at the end of September – a drop of 7.5% from the record high of $18.4 trillion recorded on June 30, 2011.
Shoppers will return $46.28 billion in holiday merchandise, a record high, according to the National Retail Federation. At brick-and-mortar stores, holiday returns can boost business because it gets shoppers into the store once more. "If people return something, there's a 70% chance they will buy something else," said Britt Beemer, retail analyst and chairman of America's Research Group.

QUOTE OF THE WEEK for 2012

“Each experience in your life was absolutely necessary in order to have gotten you to the next place, and the next, up to this very moment” – Dr. Wayne Dyer

HEALTH TIP OF THE WEEK:

Wear a Pedometer
New research suggests routinely wearing a pedometer encourages people to walk about an extra mile each day, lose weight, and lower their blood pressure. Aim for at least 30 minutes of brisk walking and a total of 10,000 steps per day.

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The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq. The DJIA was invented by Charles Dow back in 1896.
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