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Paul Stein Presents:

MONTHLY QUOTE

“Variety is the soul of pleasure.”
 

– Aphra Behn

MONTHLY TIP

A finer retirement strategy pays attention to tax implications. Many pre-retirees embark on retirement transitions without studying them.

MONTHLY RIDDLE

An ancient invention (still used the world over) permits people to see right through walls. What is it?

Last month’s riddle:
Had by some, valued by all, I’m found both inside and outside and I make both men and women fall. What am I?

Last month’s answer:

Beauty.

June 2014

THE MONTH IN BRIEF
All four of the marquee U.S. stock indices rose in May, even as some key economic indicators left something to be desired. Most overseas equities markets also saw May gains; in New York, oil futures rose as much as gold futures fell. Home sales rebounded from a lull and manufacturing strength held up in the U.S. and China. The Dow rose 0.82% on the month to close at 16,717.17 on May 30.1  

DOMESTIC ECONOMIC HEALTH
Consumer spending had retreated 0.1% in April, even with consumer incomes up 0.3% for that month. That news from the Commerce Department came 24 hours after Q1 GDP was revised down to -1.0% by the Bureau of Economic Analysis. The BEA’s second Q1 GDP estimate attributed the poorest economic quarter in three years largely to 1.6% slips in business investment and business stockpiles, plus a 6% in exports – that is, not necessarily winter weather.2,3

Consumer confidence? It was difficult to get a bead on it in May, as the two most respected polls told different stories. The Conference Board’s survey came in at 83.0, a gain of 1.3 points. The University of Michigan’s index fell 2.2 points to 81.9, with decreases in its monthly gauges of present and future expectations.4 

Consumer prices were rising appreciably – in fact, a 0.3% April rise in the Consumer Price Index took yearly consumer inflation up to 2.0%. (The Producer Price Index advanced 0.6% in that month, putting yearly wholesale inflation at 2.1%.)5

The picture was brighter when it came to manufacturing and hiring. Though the nation’s industrial production was down 0.6% in April, overall durable goods orders were up 0.8%. U.S. firms created 288,000 new jobs as the unemployment rate declined to 6.3% (although the rate of unemployed and underemployed Americans was 12.3%). May brought a half-percent advance in the Institute for Supply Management’s factory PMI, which rose to 55.4; in April, ISM’s non-manufacturing PMI improved to 55.0 in April from March’s reading of 54.2.5,6,7

GLOBAL ECONOMIC HEALTH
Was Abenomics finally ridding Japan of its deflation problem? The latest data seemed encouraging. Prime Minister Shinzo Abe’s “three arrow” economic strategy began with a Bank of Japan commitment to double the nation’s monetary supply in two years; Q1 2014 had seen GDP of 5.9% (thanks to a promise to raise sales taxes by 3% in Q2) and core inflation of 3.2%. While the Bank of Japan wants to see 2% inflation soon, the International Monetary Fund doesn’t see that happening until 2017 or later and just cautioned the central bank against abandoning its stimulus too quickly.8

China’s latest official manufacturing PMI also brought good news, rising 0.4 points to 50.8 for May. This marked the third straight month of growth in factory activity, reassuring seeing as the country’s annualized GDP had declined in the first quarter to 7.4%.9

The European Union’s factory PMI slipped to 52.2 in May, down 1.2 points from April but still flashing a growth signal. The troubling news: consumer inflation was running at just 0.6% in Germany in May, as opposed to 1.1% a month before. Consumer price indices had also shown declining inflation in Italy, Belgium and Spain, which led analysts to believe that euro area annualized consumer inflation would come in at but 0.5% in May.10

WORLD MARKETS
Few stock benchmarks lost ground in May. Russia’s RTS rebounded 12.12% and Spain’s IBEX rose 3.25%; elsewhere in Europe, the DAX rose 3.54%, the CAC 40 0.72% and the FTSE 100 0.95%, with Italy’s FTSE MIB down 0.71%. Further west, May gains came for the Merval (13.72%) and the IPC All-Share (1.60%) while the S&P/TSX Composite retreated 0.33%. In the east, May saw an 8.03% jump for India’s Sensex, a 2.29% gain for the Nikkei 225, a 4.28% climb for the Hang Seng, a rise of 2.85% for Pakistan’s KSE 100 and advances of 1.69% for the Kospi and 0.63% for the Shanghai Composite.1

As for the regional and multinational indices, the Europe Dow was the laggard with a loss of 0.23%. May advances came for the Asia Dow (3.90%), Global Dow (1.67%), MSCI World Index (1.63%), MSCI Emerging Markets Index (3.26%) and STOXX 600 (1.88%).1,11

COMMODITIES MARKETS

NYMEX crude climbed 3.25% for the month to settle at $102.71 on May 30. Other energy futures retreated: unleaded gasoline lost 0.96%, heating oil 1.59% and natural gas 5.01%. Losses also came to the farm: soybeans slipped 2.21%, cotton 8.58%, corn 9.24%, wheat 11.78% and coffee 13.98%. A couple of key crops advanced for May: sugar went +0.81%, cocoa +2.62%.12  

Gold and silver futures both lost some ground in May. Gold’s 3.23% descent led to a May 30 COMEX close of $1,245.60; silver ended the month at $18.68, losing 2.04%. Copper gained 4.22% for May while platinum advanced 1.83%. As for the U.S. Dollar Index, it rose 1.13% for May.12,13

REAL ESTATE
Both new and existing home sales improved in April. The Commerce Department recorded a 6.4% rise in purchases of new homes, while the National Association of Realtors announced a 1.3% gain in residential resales. NAR also said that pending home sales were up for a second straight month in April, rising 0.4%.2,14

April also brought more groundbreaking. Housing starts rose 13.2%, powered by a gain of almost 40% in the apartment category. Building permits were up 8.0%, again in large part due to multifamily projects getting off the drawing board.15

While the monthly numbers were solid, the year-over-year numbers were less impressive. Annually, new home sales were down 4.2% as of April; the pace of existing home sales had declined 6.8%, with the seasonally adjusted annual rate projecting to 4.65 million sales (compare that with 5.5 million in a healthy market). Existing home sale prices did rise 5.2% in a year to $201,700; the S&P/Case-Shiller home price index saw its overall annual gain slip from 12.9% in February to 12.4% in March.2,14 

Where did mortgage rates stand at the end of May? We turn to Freddie Mac’s Primary Mortgage Market Survey, specifically the May 1 and May 29 editions. On May 29, the average rate on a 30-year FRM was only 4.12%. The average interest on the 15-year FRMs was but 3.21%. Rates on 5/1-year ARMs averaged 2.96%, rates for 1-year ARMs 2.41%. Compare the May 1 numbers: 30-year FRMs, 4.29%; 15-year FRMs, 3.38%; 5/1-year ARMs, 3.05%; 1-year ARMs, 2.45%.16

LOOKING BACK…LOOKING FORWARD
More buying than selling, and not much fear – that is the simple summation of May on Wall Street. The CBOE VIX ended the month at a low, low 11.40, plunging 14.99%.1

In addition to the Dow’s aforementioned gain, the three other closely watched U.S. indices also advanced for the month – the NASDAQ rose 3.11% to 4,242.62, the S&P 500 2.10% to 1,923.57 and the Russell 2000 0.68% to 1,134.50. At the end of the month, the S&P appeared on pace for a pretty good year.1

Sources: online.wsj.com, bigcharts.com, treasury.gov - 5/30/141,17,18

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

Seasoned investors know that June usually isn’t a hot month on Wall Street. In fact, research from Bespoke Investment Group notes that from 1994-2013, the Dow has advanced in June just 40% of the time. During those 20 years, its average June performance was -0.76%. Certainly interesting, but what does this mean for June 2014? Probably nothing. The market defied (historical) trends last month and it could very well do so again this month – the blue chips might end the month at a new record high, the small caps might not lag the S&P so much, tech shares might get a boost, you can’t tell the future’s headwinds (or lack thereof) by looking intently into the past. Absent of some kind of unsettling geopolitical event, stocks may advance nicely this month if enough indicators exceed forecasts.19 

UPCOMING ECONOMIC RELEASES: Coming up in June, we have: the May ISM services PMI and a new Federal Reserve Beige Book (6/4), the May Challenger job cuts report (6/5), the Labor Department’s May employment report (6/6), April wholesale inventories (6/10), April business inventories and May retail sales (6/12), the University of Michigan’s initial June consumer sentiment index and the May PPI (6/13), May industrial output (6/16), May’s CPI plus May housing starts and building permits (6/17), a Fed policy statement (6/18), the Conference Board’s May leading indicator index (6/19), May existing home sales (6/23), May new home sales, the Conference Board’s June consumer confidence index and April’s FHFA and Case-Shiller home price indices (6/24), May durable goods orders and the final Q2 GDP estimate from the Bureau of Economic Analysis (6/25), May consumer spending (6/26), the University of Michigan’s final June consumer sentiment index (6/27), and May pending home sales (6/30).

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This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. MarketingPro, Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is not a solicitation or recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The CBOE Volatility Index® (VIX®) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. The RTS Index (abbreviated: RTSI, Russian: Индекс РТС) is a free-float capitalization-weighted index of 50 Russian stocks traded on the Moscow Exchange. The IBEX 35 is the official index of the Spanish Continuous Market. The index is comprised of the 35 most liquid stocks traded on the Continuous market. The DAX 30 is a Blue Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange.  The CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. The FTSE 100 Index is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalization. The FTSE MIB (Milano Italia Borsa) is the benchmark stock market index for the Borsa Italiana, the Italian national stock exchange. The MERVAL Index (MERcado de VALores, literally Stock Exchange) is the most important index of the Buenos Aires Stock Exchange. The Bovespa Index is a gross total return index weighted by traded volume & is comprised of the most liquid stocks traded on the Sao Paulo Stock Exchange. The Mexican IPC index (Indice de Precios y Cotizaciones) is a major stock market index which tracks the performance of leading companies listed on the Mexican Stock Exchange. The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization. The BSE SENSEX (Bombay Stock Exchange Sensitive Index), also-called the BSE 30 (BOMBAY STOCK EXCHANGE) or simply the SENSEX, is a free-float market capitalization-weighted stock market index of 30 well-established and financially sound companies listed on the Bombay Stock Exchange (BSE). Nikkei 225 (Ticker: ^N225) is a stock market index for the Tokyo Stock Exchange (TSE). The Nikkei average is the most watched index of Asian stocks. The Hang Seng Index is a freefloat-adjusted market capitalization-weighted stock market index that is the main indicator of the overall market performance in Hong Kong. Karachi Stock Exchange 100 Index (KSE-100 Index) is a stock index acting as a benchmark to compare prices on the Karachi Stock Exchange (KSE) over a period. The Korea Composite Stock Price Index or KOSPI is the major stock market index of South Korea, representing all common stocks traded on the Korea Exchange. The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange. The Europe Dow measures the European equity markets by tracking 30 leading blue-chip companies in the region. The Asia Dow measures the Asia equity markets by tracking 30 leading blue-chip companies in the region. The Global Dow is a 150-stock index of corporations from around the world created by Dow Jones & Company. The MSCI World Index is a free-float weighted equity index that includes developed world markets, and does not include emerging markets. The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The STOXX Europe 600 Index is derived from the STOXX Europe Total Market Index (TMI) and is a subset of the STOXX Global 1800 Index. The US Dollar Index measures the performance of the U.S. dollar against a basket of six currencies. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results.  Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 - online.wsj.com/mdc/public/page/2_3023-monthly_gblstkidx.html [5/30/14]

2 - marketwatch.com/economy-politics/calendars/economic [5/30/14]

3 - bbc.co.uk/news/business-27631286 [5/30/14]

4 - stltoday.com/business/local/consumer-sentiment-falls-more-than-forecast-in-may/article_63c11168-f904-5c91-872f-fafeebd1dc79.html [5/30/14]

5 - investing.com/economic-calendar/ [6/2/14]

6 - blogs.wsj.com/economics/2014/05/02/highlights-from-the-april-jobs-report/ [5/2/14]

7 - bloomberg.com/news/2014-06-02/ism-corrects-u-s-may-factory-index-to-56-after-adjustment-error.html [6/2/14]

8 - fxstreet.com/analysis/week-in-fx/2014/06/01/02/ [6/1/14]

9 - cbsnews.com/news/china-manufacturing-growth-grows-for-third-month/ [6/2/14]

10 - tinyurl.com/q2wnfnp [6/2/14]

11 - mscibarra.com/products/indices/international_equity_indices/gimi/stdindex/performance.html [5/30/14]

12 - money.cnn.com/data/commodities/ [5/30/14]

13 - online.wsj.com/mdc/public/npage/2_3050.html?mod=mdc_curr_dtabnk&symb=DXY [6/2/14]

14 - abcnews.go.com/Business/wireStory/us-home-sales-rose-64-percent-april-23841519 [5/23/14]

15 - usatoday.com/story/money/business/2014/05/16/april-housing-starts/9134725/ [5/16/14]

16 - freddiemac.com/pmms/pmms_archives.html [6/2/14]

17 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F30%2F13&x=0&y=0 [5/30/14]

17 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F30%2F13&x=0&y=0 [5/30/14]

17 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F30%2F13&x=0&y=0 [5/30/14]

17 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F29%2F09&x=0&y=0 [5/30/14]

17 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F29%2F09&x=0&y=0 [5/30/14]

17 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F29%2F09&x=0&y=0 [5/30/14]

17 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F1%2F04&x=0&y=0 [5/30/14]

17 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F1%2F04&x=0&y=0 [5/30/14]

17 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F1%2F04&x=0&y=0 [5/30/14]

18 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/2/14]

19 - americasmarkets.usatoday.com/2014/06/02/can-surging-stocks-avoid-june-swoon/ [6/2/14]

MONTHLY QUOTE

“So many of our dreams at first seem impossible, then they seem improbable, and then, when we summon the will, they soon become inevitable.”
 

– Christopher Reeve

MONTHLY TIP

Apart from your day job, do you attempt to make extra money from some form of self-employment or pastime? If you do and incur a financial loss as a result, check with your tax advisor to see that you are not subject to the hobby loss rules.

MONTHLY RIDDLE

Had by some, valued by all, I’m found both inside and outside and I make both men and women fall. What am I?

Last month’s riddle:
Though it has been around for many millennia, in one sense it is never more than a month old. What is it?

Last month’s answer:

The moon.

May 2014

THE MONTH IN BRIEF
Another month, another minor gain for stocks. The Q1 earnings season didn’t give the S&P 500 much of a lift – the index advanced 0.62% for April. Small caps were hit hard during the month. Indices in the Americas and Europe largely outperformed Asian benchmarks. COMEX gold gained in April, but NYMEX crude did not. Last month saw a major drop in new home sales, but only a fractional decrease in existing home sales. An important consumer sentiment index surged north, but a respected consumer confidence index declined. As April wrapped up, worries about a Russian takeover of Ukraine reemerged.1 

DOMESTIC ECONOMIC HEALTH
Were Americans feeling upbeat about the economy in April ... or not? It was hard to tell from the two most esteemed household surveys. The University of Michigan’s consumer sentiment index hit a 9-month peak in April, rising to 84.1 from March’s final reading of 80.0; on the other hand, the Conference Board’s survey of consumer confidence declined 1.6 points last month to 82.3.2,3 

Payrolls expanded by 288,000 new hires in April and the jobless rate fell to 6.3%. The sour note: the sharp drop in unemployment was mostly because fewer people looked for work. The U-6 rate (unemployment + underemployment) was still up at 12.3%, no doubt a troubling factoid for the Federal Reserve.4

Walking randomly up Main Street, further March indicators show a 1.1% rise in retail sales and a 0.2% increase in the Consumer Price Index. (The headline CPI was up 1.5% in a year.) Consumers spent 0.9% more in March as wages rose 0.5%.3,5

Even with that significant consumer spending boost, the economy hardly grew in Q1. In its initial estimate, the Bureau of Economic Analysis measured first quarter GDP at 0.1% – not exactly the 1.2% growth projected by analysts in a Bloomberg poll, and a far cry from the 2.6% GDP of Q4.6

The Institute for Supply Management’s factory PMI was at a healthy 53.7 in March and an even healthier 54.9 in April; by April, the factory sector had expanded for 11 straight months. ISM’s service sector PMI came in at 53.1 for March. The third month of the year saw a 2.6% pickup in durable goods orders, with the gain at 2.2% minus defense industry orders. Wholesale inflation increased, too – the 0.5% March rise in the Producer Price Index took the yearly rise in PPI up to 1.4%.3,7,8

Last but not least, the Fed announced another $10 billion cut in QE3 come May, reducing its monthly economic stimulus to $45 billion. Its April 30 statement reiterated that it would keep the main U.S. interest rate near zero for a “considerable time” after the end of its extraordinary asset purchase campaign.6

GLOBAL ECONOMIC HEALTH
Was Russia poised to take over Ukraine? Tensions heightened between the nations as April ended, with Russian separatists staging protests and taking foreign military observers hostage. In late April, the EU expanded its economic sanctions against Russia and Standard & Poor’s downgraded the nation’s debt rating to BBB- (a step above junk). NATO’s top commander, U.S. Air Force General Phillip Breedlove, reminded the press that “highly organized, highly supported forces [were] in place” if Russia wished to mount a full-scale invasion. While the ruble was down more than 7% YTD against the dollar as April ended, Russian officials spoke of a retaliatory economic response against the EU and the United States. (Since so many eurozone nations depend on energy imports from Russia, the EU has so far refrained from truly harsh sanctions against the country.)9

At least the global manufacturing picture looked a bit brighter. China’s official purchasing manager index ticked north a tenth of a percent to 50.4 in April, and last month found South Korean exports up 9% year-over-year. The United Kingdom’s Markit manufacturing PMI rose 1.5 points to 57.3 for April, while Germany’s official factory PMI advanced to 54.2. The overall euro area manufacturing PMI rose slightly to 53.3 last month.10,11

WORLD MARKETS
Major indices in the Americas went mostly green last month. April brought gains of 0.62% for the IPC All-Share, 6.40% for the Merval, 2.21% for the TSX Composite and 2.40% for the Bovespa. Asia Pacific indices were up and down – KSE 100, +6.45%; PSE Composite, +4.34%; ASX 200, +1.75%; Asia Dow, +0.52%; Sensex, +0.14; Hang Seng, -0.08%; Shanghai Composite, -0.35%; Kospi, -1.20%; Nikkei 225, -3.53%. Aside from a 5.74% drop for Russia’s RTS, key indices in Europe mostly advanced – the DAX rose 0.50%, the CAC 40 2.18%, the STOXX 600 1.07%, the FTSE 100 2.75% and the Europe Dow 0.72%.1

The Global Dow was up 0.75% for April; the MSCI Emerging Markets Index rose just 0.06%, but the MSCI World Index gained 0.83%.1,12

COMMODITIES MARKETS

At the end of April, a barrel of oil was worth $99.74 on the NYMEX, an ounce of gold $1,295.90 on the COMEX. Commodity performance was mixed for the month, with some of the biggest gains unsurprisingly coming in crops.13

Coffee was out front in April, with futures rising 16.48%. Cotton gained 1.28%, soybeans 4.62%, cocoa 1.22%, and corn 2.34%; sugar fell 4.59% for the month. Thoughts of possible interruption of natural gas supplies in Europe sent those futures 9.73% higher in April; unleaded gasoline futures also rose 1.57%. Heating oil futures retreated 0.19% in April, and oil futures pulled back 1.79%.13

Copper (-0.71%) and silver (-3.34%) did not advance in April, but gold (+0.67%) and platinum (+0.76%) did. The U.S. Dollar Index lost 0.75% in April and settled at 79.47 to end the month.13,14

REAL ESTATE
Was the housing market stalling out? Or just having a seasonal slump? The March home sales numbers certainly paled in comparison to a year ago, with reduced inventory and higher interest rates exerting their influence. The Census Bureau reported a 14.5% drop in new home purchases; the National Association of Realtors announced a mere 0.2% dip in resales. A bright spot surfaced: NAR also measured a 3.4% gain in pending home sales, the first increase since June.3

As for home prices, the annual increase recorded by the S&P/Case-Shiller index decreased to 12.9% in the February edition from the previous 13.2%. On a monthly basis, the Case-Shiller was flat. NAR recorded a median existing home sales price of $198,500 in March, up 7.9% year-over-year. On the construction front, a 2.8% March boost in housing starts was offset by a 2.4% fall for building permits.3,15

In Freddie Mac’s March 27 Primary Mortgage Market Survey, average interest rates for various home loans were as follows: 30-year FRMs, 4.40%; 15-year FRMs, 3.42%; 5/1-year ARMs, 3.10%; 1-year ARMs, 2.44%. On May 1, most of those numbers were lower, with average rates on 30-year FRMs at 4.29%, 15-year FRMs at 3.38%, 5/1-year ARMs at 3.05%, and 1-year ARMs at 2.45%.16

LOOKING BACK…LOOKING FORWARD
The Dow wrapped up April with a fresh record close of 16,580.84 and the S&P 500 ended the month near its all-time peak at 1,883.95. The Nasdaq concluded April at 4,114.56. A 3.94% April descent left the Russell 2000 at -3.16% YTD. The CBOE VIX fell 3.39% last month to end April at -2.26% YTD.1

As the trading day ended April 30, 310 S&P 500 member firms had announced quarterly results, with 75% of them exceeding profit forecasts and 52% of them beating sales projections. Analysts tracking profits for Bloomberg estimated that profits for S&P 500 companies improved 3.4% in the first quarter.6

Sources: online.wsj.com, bigcharts.com, treasury.gov - 4/30/141,17,18

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

So far, it looks like Wall Street is on pace for ... well ... exactly the kind of year analysts thought it would have. Can stocks find fresh tailwinds in May? Will investors opt to buy rather than sell given some solid fundamental indicators of late? As the world closely watches events in Ukraine and continues to monitor the signals from the Chinese and eurozone economies, it is pretty hard to deny the stream of positive news coming from the U.S. There definitely seems to a sentiment that the U.S. economy is growing stronger and stronger, and improving jobs data and a spring pickup in home sales would add to that perception.

UPCOMING ECONOMIC RELEASES: Here is what awaits for the rest of May: the ISM services PMI (5/5), March wholesale inventories (5/9), April retail sales (5/13), March business inventories and April’s PPI (5/14), the April CPI and April industrial production (5/15), the University of Michigan’s initial May consumer sentiment index plus April housing starts and building permits (5/16), the April 30 FOMC minutes (5/21), the Conference Board’s April leading indicator index and April existing home sales (5/22), April new home sales (5/23), April hard goods orders, the Conference Board’s May consumer confidence index and the March FHFA and Case-Shiller home price indices (5/27), April pending home sales and the BEA’s second Q1 GDP reading (5/29), and then the University of Michigan’s final May consumer sentiment index and the April consumer spending report (5/30).

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<<RepresentativeDisclosure>>

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. MarketingPro, Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is not a solicitation or recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The CBOE Volatility Index® (VIX®) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. The Mexican IPC index (Indice de Precios y Cotizaciones) is a major stock market index which tracks the performance of leading companies listed on the Mexican Stock Exchange. The MERVAL Index (MERcado de VALores, literally Stock Exchange) is the most important index of the Buenos Aires Stock Exchange. The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization. The Bovespa Index is a gross total return index weighted by traded volume & is comprised of the most liquid stocks traded on the Sao Paulo Stock Exchange. Karachi Stock Exchange 100 Index (KSE-100 Index) is a stock index acting as a benchmark to compare prices on the Karachi Stock Exchange (KSE) over a period. The Philippine Stock Exchange PSEi Index is a capitalization-weighted index composed of stocks representative of the Industrial, Properties, Services, Holding Firms, Financial and Mining & Oil Sectors of the PSE; it was formerly named the PSE Composite. The S&P/ASX 200 is Australia's “premier” share market index. The Asia Dow measures the Asia equity markets by tracking 30 leading blue-chip companies in the region. The BSE SENSEX (Bombay Stock Exchange Sensitive Index), also-called the BSE 30 (BOMBAY STOCK EXCHANGE) or simply the SENSEX, is a free-float market capitalization-weighted stock market index of 30 well-established and financially sound companies listed on the Bombay Stock Exchange (BSE). The Hang Seng Index is a freefloat-adjusted market capitalization-weighted stock market index that is the main indicator of the overall market performance in Hong Kong. The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange. The Korea Composite Stock Price Index or KOSPI is the major stock market index of South Korea, representing all common stocks traded on the Korea Exchange. Nikkei 225 (Ticker: ^N225) is a stock market index for the Tokyo Stock Exchange (TSE). The Nikkei average is the most watched index of Asian stocks. The RTS Index (abbreviated: RTSI, Russian: Индекс РТС) is a free-float capitalization-weighted index of 50 Russian stocks traded on the Moscow Exchange. The DAX 30 is a Blue Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. The STOXX Europe 600 Index is derived from the STOXX Europe Total Market Index (TMI) and is a subset of the STOXX Global 1800 Index. The FTSE 100 Index is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalization. The Europe Dow measures the European equity markets by tracking 30 leading blue-chip companies in the region. The Global Dow is a 150-stock index of corporations from around the world created by Dow Jones & Company. The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The MSCI World Index is a free-float weighted equity index that includes developed world markets, and does not include emerging markets. The US Dollar Index measures the performance of the U.S. dollar against a basket of six currencies. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results.  Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 - online.wsj.com/mdc/public/page/2_3023-monthly_gblstkidx.html [4/30/14]

2 - tinyurl.com/n2hh8eh [4/25/14]

3 - investing.com/economic-calendar/ [4/30/14]

4 - blogs.wsj.com/economics/2014/05/02/highlights-from-the-april-jobs-report/ [5/2/14]

5 - briefing.com/investor/calendars/economic/2014/04/28-02 [5/1/14]

6 - bloomberg.com/news/2014-04-30/u-s-stock-index-futures-fall-on-twitter-ebay-earnings.html [4/30/14]

7 - ism.ws/ISMReport/NonMfgROB.cfm [4/3/14]

8 - ism.ws/ISMReport/MfgROB.cfm [5/1/14]

9 - businessweek.com/news/2014-04-28/u-dot-s-dot-aims-at-putin-s-inner-circle-with-latest-round-of-sanctions [4/28/14]

10 - ft.com/cms/s/0/41fe3f6c-d112-11e3-9f90-00144feabdc0.html [5/1/14]

11 - tinyurl.com/lh35sh7 [4/23/14]

12 - mscibarra.com/products/indices/international_equity_indices/gimi/stdindex/performance.html [4/30/14]

13 - money.cnn.com/data/commodities/ [4/30/14]

14 - online.wsj.com/mdc/public/npage/2_3050.html?mod=mdc_curr_dtabnk&symb=DXY [5/1/14]

15 - realtor.org/news-releases/2014/04/existing-home-sales-remain-soft-in-march [4/22/14]

16 - freddiemac.com/pmms/pmms_archives.html [5/1/14]

17 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F1%2F13&x=0&y=0 [4/30/14]

17 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F1%2F13&x=0&y=0 [4/30/14]

17 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F30%2F13&x=0&y=0 [4/30/14]

17 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F31%2F04&x=0&y=0 [4/30/14]

17 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F31%2F04&x=0&y=0 [4/30/14]

17 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F30%2F04&x=0&y=0 [4/30/14]

18 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [5/1/14]

MONTHLY QUOTE

“That which seems the height of absurdity in one generation often becomes the height of wisdom in the next.”
 

– John Stuart Mill

MONTHLY TIP

Every dollar you contribute to your retirement plan today could be worth much more by the time you retire thanks to investment and compounding. So even if your budget is tight, contribute as much as you can.

MONTHLY RIDDLE

Though it has been around for a long time, in one sense it is never more than a month old. What is it?

Last month’s riddle:
It is born in the air and it hears and speaks even though it has no ears, mouth or body. What is it?

Last month’s answer:

An echo.

April 2014

THE MONTH IN BRIEF
Thanks in part to a March 31 rally, the S&P 500 managed to gain 0.69% last month. Comments from Federal Reserve chair Janet Yellen alternately startled and soothed investors; events in the Ukraine didn’t send U.S. stocks markedly lower, though they certainly held back European benchmarks. In the commodities markets, crop futures continued rising while energy futures and metals mostly descended. Analysts wondered if the softness in the housing market was seasonal or more entrenched. As the bull market celebrated its fifth birthday, investors mulled how long it would continue.1 

DOMESTIC ECONOMIC HEALTH
On March 19, the Federal Reserve announced further tapering of QE3 - another cut of $10 billion effective in April. The market anticipated that, but it didn’t anticipate Janet Yellen’s spontaneous remarks at the central bank’s ensuing press briefing. Asked what the lag time might be between the end of the current Fed stimulus and an increase in the benchmark interest rate, Yellen estimated six months. As the stimulus is projected to end in late 2014, that implied a rate hike as early as spring 2015, and stocks plunged in response. Wall Street quickly recovered, however, and Yellen reassured the markets on March 31, noting that the economy would still require an “extraordinary” commitment to economic stimulus for the near future.2,3 

Some very good news emerged on a few fronts. Consumer spending and consumer incomes were both up 0.3% for February, echoing the (revised) January increases earlier reported by the Commerce Department. February also saw retail sales improve 0.3% - the first gain in three months and a nice rebound from the (revised) 0.6% drop in January.4,5

Households didn’t have to contend with much inflation, and for that matter wholesalers didn’t either: February brought only a 0.1% in the headline Consumer Price Index and a 0.1% retreat for the headline Producer Price Index. The CPI was up just 1.1% in a year, the PPI just 0.9%.6

Consumer confidence – as measured by the Conference Board – hit its highest level in six years in March. The CB’s monthly index came in at 82.3, a peak unseen since January 2o08. Consumer sentiment – as measured by the University of Michigan – declined slightly to 80.0 from 81.6 at the end of February. (For the record, the CB survey carries slightly more weight with economists and market analysts.)4,7

Unemployment was at 6.7% in February, which was 0.1% higher than in January but down a full percent from a year before. Non-farm payrolls added 175,000 hires, slightly below the monthly average of 189,000 noted over the past year.8

As the weather warmed, the pace of growth in the factory sector picked up slightly. Overall durable goods orders were up 2.2% in February, and the Institute for Supply Management’s factory PMI rose half a point to 53.7 in March. Early in March, however, word came that ISM’s non-manufacturing PMI had stumbled to 51.6 in February from the January reading of 54.0.9,10,11

GLOBAL ECONOMIC HEALTH
On March 16, Crimeans voted to leave Ukraine and join Russia in what seemed a clear violation of Ukraine’s constitution. To most diplomats, it looked merely like a Russian land grab. Russia met with resulting economic sanctions, but still had 40,000 troops amassed on the Ukraine’s borders when March ended, inviting tougher measures against its weak economy. As Russia exports about 3 trillion cubic feet of natural gas annually to the euro area via pipelines through Ukraine, fear of military action (and disruption of natural gas supplies) worried global investors for most of the month. Turning to the regular economic indicators of the eurozone, Markit’s euro area factory PMI came in at 53.0 for March (down 0.2% from February) and the eurozone jobless rate remained at 11.9% in February (though Germany’s jobless rate declined for a fourth consecutive month in March).12,13,14

It seemed that Asian economies were still waiting for renewed demand to spur exports. China’s manufacturing sector was still sputtering: the nation’s “official” factory PMI for March read 50.3, but the respected HSBC PMI hit an 8-month low of 48.0. Other March HSBC manufacturing PMIs came in as follows: India, 51.3; Taiwan, 52.7; South Korea, 50.4; Vietnam, 51.3; Indonesia, a 7-month low of 50.1.15

WORLD MARKETS
Generally speaking, markets in the Asia Pacific region and the Americas had it easier than their European counterparts. India’s Sensex soared 5.99%, Pakistan’s KSE 100 rose 5.34%, Indonesia's Jakarta Composite gained 3.20%, the Asia Dow advanced 3.03%, and Taiwan’s TWSE rose 2.43%. To our south, Argentina’s Merval climbed 10.19%, Brazil’s Bovespa 7.05%, and Mexico’s IPC All-Share 4.33%. The broad MSCI Emerging Markets Index gained 2.92% (and for the record, the MSCI World Index lost 0.09%). The only major emerging-market indices to lose more than 1% in March were Hong Kong’s Hang Seng (3.00%) and China’s Shanghai Composite (1.12%).1,16

Given the unrest in the Ukraine, it isn’t surprising to find major European indices in the red for March. France’s CAC 40 slipped but 0.38%, the Europe Dow went down 1.03%, the DJ STOXX 600 lost 1.10%, Germany’s DAX retreated 1.40% and Great Britain’s FTSE 100 fell 3.10%. Two of the more volatile European indices also dipped lower last month: Ireland’s ISEQ lost 3.86%, Russia’s RTS 3.50%.1i COmposite : the TSX Composite (-2.30%), the  gan'

COMMODITIES MARKETS

Crops set the pace in March. Aside from coffee losing 1.03%, there were numerous gains – wheat, 16.53%; sugar, 12.26%; corn, 6.99%; cotton, 8.25%; soybeans, 1.56%; cocoa, 0.20%. Among energy futures, oil dipped 1.31%, heating oil 4.87% and natural gas 4.85%. March did see a 4.18% ascent for unleaded gasoline.17

As the trading day wrapped up on the COMEX on March 31, an ounce of gold was valued at $1,283.40, an ounce of silver at $19.75. Those prices reflected a 3.12% March retreat for gold and a 6.98% March drop for silver. Copper slipped 5.80% for the month, platinum 1.92%. The U.S. Dollar Index ended March at 80.11, rising 0.53% for the month.17,18

REAL ESTATE
Residential resales had declined again. Sales of existing homes, the National Association of Realtors reported, dipped 0.4% in February. Pending home sales were down 0.8% on the month as well. Analysts hoped that short-term issues (pinched inventory and rough weather) were the barriers preventing improvement.11,19

New home sales retreated 3.3% in February (with new homes moving at the slowest pace since September). Sales were down 1.1% annually according to Commerce Department calculations. Housing starts did rise 0.3% in February, complemented by a 7.7% monthly increase in building permits.7,20

Slimmer inventory was a factor in rising house prices. In February, NAR noted, the median sale price of an existing home was $189,000, up 9.1% in 12 months. January’s S&P/Case-Shiller Home Price Index showed an overall annual gain of 13.2% in addition to a monthly increase of 0.8%.7,19

Most mortgage types grew slightly more expensive last month. Tracking Freddie Mac’s March 27 and February 27 Primary Mortgage Market Surveys, we see the following increases in average interest rates for varieties of home loans: 30-year FRMs, 4.37% to 4.40%; 15-year FRMs, 3.39% to 3.42%; 5/1-year ARMs, 3.05% to 3.10%. On the other hand, the average interest rate on the 1-year ARM descended 0.08% to 2.44%.21

LOOKING BACK…LOOKING FORWARD
Major U.S. indices closed as follows on March 31: Dow, 16,457.66; Nasdaq, 4,198.99; S&P 500, 1,872.34; Russell 2000, 1,173.04; CBOE VIX, 13.88. Small caps lost 0.84% on the month, leaving the RUT up 0.81% on the year so far; the VIX lost 0.86% for March, reducing its YTD advance to 1.17%.1

Sources: online.wsj.com, bigcharts.com, treasury.gov - 3/31/141,22,23

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

March marked the end of the first quarter, and it was a mediocre quarter for stocks with the S&P 500 rising little more than a percent. The bull market was clearly tempered these past three months, and articles have emerged here and there about how much longer it can last. (Six more months? Another year? Ten years?) It could be that, as Janet Yellen and other analysts have speculated, the winter froze the economy and the resulting indicators chilled the confidence of investors. We are on the cusp of another earnings season, and if quarterly results and fundamentals both show notable upside while overseas geopolitical crises lessen, then stocks may find even more room to rally. Don’t count the bull down and out just yet.1

UPCOMING ECONOMIC RELEASES: On tap for the balance of April, we have: the March ADP employment change report and February factory orders (4/2), ISM’s service-sector PMI and the March Challenger job cuts report (4/3), the Labor Department’s March jobs report (4/4), February wholesale inventories and the March 19 FOMC minutes (4/9), the University of Michigan’s initial April consumer sentiment index and March’s PPI (4/11), February business inventories and March retail sales (4/14), the March CPI and the April NAHB housing market index (4/15), a new Fed Beige Book, March industrial output and March housing starts and building permits (4/16), the Conference Board’s March leading indicator index (4/21), March existing home sales and the February FHFA housing price index (4/22), March new home sales (4/23), March durable goods orders (4/24), the University of Michigan’s final April consumer sentiment index (4/25), March pending home sales and March consumer spending data (4/28), the Conference Board’s April consumer confidence index and February’s Case-Shiller home price index (4/29), and finally a Fed policy announcement, April’s ADP employment change report and the first estimate of Q1 GDP from the federal government (4/30).

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<<RepresentativeDisclosure>>

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. MarketingPro, Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is not a solicitation or recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. The BSE SENSEX (Bombay Stock Exchange Sensitive Index), also-called the BSE 30 (BOMBAY STOCK EXCHANGE) or simply the SENSEX, is a free-float market capitalization-weighted stock market index of 30 well-established and financially sound companies listed on the Bombay Stock Exchange (BSE). Karachi Stock Exchange 100 Index (KSE-100 Index) is a stock index acting as a benchmark to compare prices on the Karachi Stock Exchange (KSE) over a period. The IDX Composite or Jakarta Composite Index is an index of all stocks that are traded on the Indonesia Stock Exchange (IDX). The Asia Dow measures the Asia equity markets by tracking 30 leading blue-chip companies in the region. The TWSE, or TAIEX, Index is capitalization-weighted index of all listed common shares traded on the Taiwan Stock Exchange. The MERVAL Index (MERcado de VALores, literally Stock Exchange) is the most important index of the Buenos Aires Stock Exchange. The Bovespa Index is a gross total return index weighted by traded volume & is comprised of the most liquid stocks traded on the Sao Paulo Stock Exchange. The Mexican IPC index (Indice de Precios y Cotizaciones) is a major stock market index which tracks the performance of leading companies listed on the Mexican Stock Exchange. The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The MSCI World Index is a free-float weighted equity index that includes developed world markets, and does not include emerging markets. The Hang Seng Index is a freefloat-adjusted market capitalization-weighted stock market index that is the main indicator of the overall market performance in Hong Kong. The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange. The CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. The Europe Dow measures the European equity markets by tracking 30 leading blue-chip companies in the region. The STOXX Europe 600 Index is derived from the STOXX Europe Total Market Index (TMI) and is a subset of the STOXX Global 1800 Index. The DAX 30 is a Blue Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The FTSE 100 Index is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalization. The ISEQ Overall Index is a capitalization-weighted index of all official list equities in the Irish Stock Exchange, excluding U.K.-registered companies. The RTS Index (abbreviated: RTSI, Russian: Индекс РТС) is a free-float capitalization-weighted index of 50 Russian stocks traded on the Moscow Exchange. The US Dollar Index measures the performance of the U.S. dollar against a basket of six currencies. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results.  Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 - online.wsj.com/mdc/public/page/2_3023-monthly_gblstkidx.html [3/31/14]

2 - sacbee.com/2014/03/19/6251229/yellen-speaks-clarity-weak-stocks.html [3/19/14]

3 - nytimes.com/2014/04/01/business/daily-stock-market-activity.html [4/1/14]

4 - usatoday.com/story/money/business/2014/03/28/march-consumer-sentiment/7002517/ [3/28/14]

5 - reuters.com/article/2014/03/13/us-retail-sales-idUSBREA2C0YK20140313 [3/13/14]

6 - rttnews.com/2287985/u-s-consumer-prices-tick-up-0-1-in-february-in-line-with-estimates.aspx

7 - reuters.com/article/2014/03/25/us-usa-economy-idUSBREA2O10I20140325 [3/25/14]

8 - ncsl.org/research/labor-and-employment/national-employment-monthly-update.aspx [4/1/14]

9 - ism.ws/ISMReport/MfgROB.cfm [4/1/14]

10 - ism.ws/ISMReport/NonMfgROB.cfm [3/3/14]

11 - briefing.com/investor/calendars/economic/2014/03/24-28 [3/28/14]

12 - reuters.com/article/2014/03/30/ukraine-crisis-idUSL5N0MR0DG20140330 [3/30/14]

13 - eia.gov/countries/country-data.cfm?fips=up [4/1/14]

14 - tinyurl.com/oa37eke [4/1/14]

15 - tinyurl.com/pwxqnxz [4/1/14]

16 - mscibarra.com/products/indices/international_equity_indices/gimi/stdindex/performance.html [3/31/14]

17 - money.cnn.com/data/commodities/ [3/31/14]

18 - online.wsj.com/mdc/public/npage/2_3050.html?mod=mdc_curr_dtabnk&symb=DXY [3/31/14]

19 - marketwatch.com/story/existing-home-sales-decline-04-in-february-2014-03-20-109104 [3/20/14]

20 - nahb.org/generic.aspx?genericContentID=45409 [4/1/14]

21 - freddiemac.com/pmms/archive.html?year=2014 [4/1/14]

22 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F1%2F13&x=0&y=0 [3/31/14]

22 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F1%2F13&x=0&y=0 [3/31/14]

22 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F1%2F13&x=0&y=0 [3/31/14]

22 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F31%2F04&x=0&y=0 [3/31/14]

22 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F31%2F04&x=0&y=0 [3/31/14]

22 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F31%2F04&x=0&y=0 [3/31/14]             

23 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [4/1/14]

MONTHLY QUOTE

“We must believe that we are gifted for something, and that this thing, at whatever cost, must be attained.”
 

– Marie Curie

MONTHLY TIP

Are your financial needs and priorities the same as they were five years ago? Time may have subtly changed them. Every few years, you should review your financial strategy to see if it needs altering in light of new needs and goals.

MONTHLY RIDDLE

It is born in the air and it hears and speaks even though it has no ears, mouth or body. What is it?

Last month’s riddle:
What possesses a foot, yet no legs?

Last month’s answer:

A snail.

March 2014

THE MONTH IN BRIEF
Wall Street staged an impressive comeback in February – emerging market currency troubles, middling economic indicators and unrest brewing on multiple continents couldn’t stop the bulls from running. The Dow gained 3.97% for the month and the S&P 500, Nasdaq and Russell 2000 all gained more than 4%. Important commodities and most foreign stock exchanges also rallied. While existing home sales slipped, new home sales jumped. New Federal Reserve chair Janet Yellen soothed the markets with reassuring remarks on Capitol Hill.1 

DOMESTIC ECONOMIC HEALTH
Why were so many economic indicators so feeble? Maybe it was the weather. Janet Yellen thought so – on February 27, she told Congress that the miserable winter much of the U.S. was enduring was likely distorting economic reports for the worse. The unemployment rate fell to 6.6% in January, but hiring fell off as well with the economy generating 113,000 new jobs (payrolls had grown by an average of 182,000 positions a month during 2013). The federal government also revised its estimate of Q4 GDP down to 2.4%.2,3

Consumer spending represented a bright spot – personal spending was up 0.4% for January and personal incomes rose 0.3%, even as overall retail sales declined 0.4%. Still, the Commerce Department revised December’s consumer spending gain down to 0.1% and the Q4 gain down to 2.4%.4,5

Consumer prices moved north just 0.1% in January while producer prices rose 0.2%; the gains in the core CPI and PPI matched the respective headline numbers.6

As for consumer sentiment ... the Conference Board and University of Michigan indices told slightly different stories. Last month’s final University of Michigan index came in at 81.6, a minor improvement from the final January mark of 81.2. The Conference Board’s consumer confidence index (which arguably carries greater weight) slipped 1.3 points to 78.1 for February. The CB’s leading economic indicator index was up 0.3% in January.6,7

American industrial output had fallen 0.3% in January; economists polled by Briefing.com had expected a gain of that magnitude. Durable goods orders fell 1.0% in the first month of 2014, though they advanced 1.1% in January minus transportation orders.5,7

The much-watched purchasing manager indices maintained by the Institute for Supply Management showed factory and service sector growth holding up even with the severe cold. ISM’s manufacturing PMI improved from 51.3 in January to 53.2 in February. Weeks earlier, its service sector PMI had shown a 1% gain for January to 54.0.8,9

GLOBAL ECONOMIC HEALTH
As February came to a close, the threat of combat in Ukraine hadn’t unsettled the markets to the degree it would in early March. The currency problems and capital flight plaguing the “Fragile Five” – as Morgan Stanley christened the economies of South Africa, Turkey, Brazil, India and Indonesia – moderated in February, with the average implied volatility of their currencies hitting 3-month lows weeks after touching 4-month highs.10

China’s official factory PMI read just 50.2 in February, an 8-month low. The preliminary HSBC/Markit PMI for China came in at 48.3 for January, signaling contraction of its manufacturing sector. China’s official service sector PMI, however, was at 55.0 last month (a 3-month high). India’s HSBC/Markit PMI was at 52.5 in February (its best reading in a year); South Korea’s fell to 49.8 (the first reading below 50 since October).11,12

In the euro area, consumer inflation was still very low in February (0.8%) while the jobless rate was still high at 12.0%. Markit’s PMI for the eurozone manufacturing sector showed slower growth at 53.2 in February, down from 54.0 a month earlier – yet Markit manufacturing PMIs improved in Germany, Spain, Italy and France.13,14

WORLD MARKETS
As U.S. benchmarks reversed course and turned north in February, so did many others. Take the MSCI Emerging Market Index, up 3.19% last month; the MSCI World Index topped that gain with a 4.81% February climb. The Global Dow gained 3.95%, the Asia Dow 3.33% and the Europe Dow a tremendous 7.28%; the STOXX Europe 600 was up 4.81% for the month.1,15

While Canada’s TSX Composite advanced 3.76% in February, the same couldn’t be said of Mexico’s IPC All-Share (-5.13%), Brazil’s Bovespa (-1.14%) or Argentina’s MERVAL (-3.89%). In the Asia Pacific region, Australia's S&P/ASX 200 gained 4.14% in February; the Nikkei 225 dipped 0.49%.  Both the Shanghai Composite (1.14%) and the Hang Seng (3.64%) posted February gains. India’s Sensex rose 2.96%, Indonesia’s Jakarta Composite 4.96%; Pakistan’s KSE 100 lost 3.74%. In Europe, the FTSE 100 improved 4.60% in February; the CAC 40 was up 5.82%, the DAX 4.14%. Ireland’s ISEQ advanced 11.69%, and Russia's RTS fell 2.59%.1i COmposite : the TSX Composite (-2.30%), the  gan'

COMMODITIES MARKETS

Coffee was hot in February – to put it mildly. Coffee futures jumped 42.57% for the month, the biggest gain by far among many in key crops. Soybeans rose 10.07% in February, corn 5.30%, wheat 7.67%, cotton 0.65%, cocoa 1.63% and sugar 5.92%.16

COMEX gold ended February at $1,321.60 per ounce following a 6.59% ascent for the month. Silver beat that, rising 10.78%. Copper rose just 0.59%; platinum futures advanced 5.20%. The U.S. Dollar Index slipped 1.99% for February, ending the month at 79.69.16,17

Naturally, oil futures rose with emerging market concerns. NYMEX crude wrapped up February at $102.59. Its 5.49% monthly gain paled to that of the 13.58% rise made by unleaded gasoline futures. Natural gas was up 5.87% for February, while heating oil futures descended 6.23%.16

REAL ESTATE
According to the National Association of Realtors, January saw a 5.1% plunge in residential resales, with sales of single-family homes down 5.8%. Existing home sales were also down 5.1% across the past year.7,18

NAR also had pending home sales up just 0.1% in January; across the past 12 months, they had declined 9.0%. The Census Bureau delivered better news regarding new home purchases: a 9.6% January gain. December’s edition of the S&P/Case-Shiller Home Price Index showed a 13.4% annualized rise in house prices across 20 cities, slightly lower than the 13.7% yearly gain reported in the November edition.7

January’s harsh weather meant no increases in groundbreaking: housing starts were down 16.0% in the largest monthly retreat seen since February 2011. Building permits declined 5.4%.19

While 30-year home loans grew a little more expensive in February, Freddie Mac’s Primary Mortgage Market Survey showed average interest rates for other types of mortgages lower. From the January 30 survey to the February 27 survey, the average interest on a 30-year FRM increased 0.05% to 4.37%. Average rates on a 15-year FRM, however, were 0.01% lower on February 27 at 3.39%. Freddie’s February 27 survey also found average interest rates on 5/1-year ARMs and 1-year ARMs respectively at 3.05% and 2.52%; those averages declined 0.07% and 0.03% from the January 30 PMMS.20

LOOKING BACK…LOOKING FORWARD
February’s percentage gains are even more striking when you realize that the first market day of the month saw a 326-point dive for the Dow. The S&P finished February with yet another record close – 1,859.45 – after a 4.31% ascent for the month. The Dow wrapped up February at 16,321.71, rising 3.97% in the second month of the year; the Nasdaq advanced 4.98% to wrap up February at 4,308.12. Last month was great for the small caps as well, with the Russell 2000 improving 4.61% to a February 28 close of 1,183.03. The CBOE VIX slid 23.95% during the month, ending February at 14.00.1,21

Sources: online.wsj.com, bigcharts.com, treasury.gov - 2/28/141,22,23

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

March started much like February, with a triple-digit loss for the Dow as tensions in Ukraine weighed on investors’ minds. Would this be the “black swan” event so long absent from the stock market? Or would the current bull, now a week from its fifth anniversary, keep stampeding? The biggest possible economic threat stemming from the crisis might be the chance of eurozone economic sanctions against Russia, which in the worst-case outcome leads Russia to reduce energy exports to the euro area and sends the eurozone back into another recession. So far, this feels like a short-term event with an impact that may be muted on Wall Street (oil prices aside). The bull market has managed to saunter through many geopolitical and economic shocks since 2009, and its resilience may take investors through this one without too much negative impact.21

UPCOMING ECONOMIC RELEASES: Here is the data stream for the rest of March: February’s ISM services index and ADP employment change report, plus the latest Fed Beige Book (3/5), the February Challenger job-cuts report (3/6), the Labor Department’s February jobs report (3/7), January wholesale inventories (3/11), January business inventories and February retail sales (3/13), the University of Michigan’s initial March consumer sentiment index and February’s PPI (3/14), February industrial output and March’s NAHB housing market index (3/17), February housing starts and building permits, and the February CPI (3/18), a Fed policy announcement (3/19), February existing home sales and the Conference Board’s February leading indicator index (3/20), February new home sales data, the Conference Board’s March consumer confidence index, the January Case-Shiller home price index and the January FHFA housing price index (3/25), February durable goods orders (3/26), February pending home sales figures from NAR and the final estimate of Q4 growth from the federal government (3/27) , and then the University of Michigan’s final March consumer sentiment index and February consumer spending data (3/28).

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<<RepresentativeDisclosure>>

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is not a solicitation or recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The MSCI World Index is a free-float weighted equity index that includes developed world markets, and does not include emerging markets. The Global Dow is a 150-stock index of corporations from around the world created by Dow Jones & Company. The Asia Dow measures the Asia equity markets by tracking 30 leading blue-chip companies in the region. The Europe Dow measures the European equity markets by tracking 30 leading blue-chip companies in the region. The STOXX Europe 600 Index is derived from the STOXX Europe Total Market Index (TMI) and is a subset of the STOXX Global 1800 Index. The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization. The Mexican IPC index (Indice de Precios y Cotizaciones) is a major stock market index which tracks the performance of leading companies listed on the Mexican Stock Exchange. The Bovespa Index is a gross total return index weighted by traded volume & is comprised of the most liquid stocks traded on the Sao Paulo Stock Exchange. The MERVAL Index (MERcado de VALores, literally Stock Exchange) is the most important index of the Buenos Aires Stock Exchange. The S&P/ASX 200 is recognized as the institutional investable benchmark in Australia. The index covers approximately 80% of Australian equity market capitalization. Nikkei 225 (Ticker: ^N225) is a stock market index for the Tokyo Stock Exchange (TSE). The Nikkei average is the most watched index of Asian stocks. The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange. The Hang Seng Index is a freefloat-adjusted market capitalization-weighted stock market index that is the main indicator of the overall market performance in Hong Kong. The BSE SENSEX (Bombay Stock Exchange Sensitive Index), also-called the BSE 30 (BOMBAY STOCK EXCHANGE) or simply the SENSEX, is a free-float market capitalization-weighted stock market index of 30 well-established and financially sound companies listed on the Bombay Stock Exchange (BSE). The IDX Composite or Jakarta Composite Index is an index of all stocks that are traded on the Indonesia Stock Exchange (IDX). Karachi Stock Exchange 100 Index (KSE-100 Index) is a stock index acting as a benchmark to compare prices on the Karachi Stock Exchange (KSE) over a period. The FTSE 100 Index is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalization. The CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. The DAX 30 is a Blue Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The RTS Index (abbreviated: RTSI, Russian: Индекс РТС) is a free-float capitalization-weighted index of 50 Russian stocks traded on the Moscow Exchange. The ISEQ Overall Index is a capitalization-weighted index of all official list equities in the Irish Stock Exchange, excluding U.K.-registered companies. The US Dollar Index measures the performance of the U.S. dollar against a basket of six currencies. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results.  Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 - online.wsj.com/mdc/public/page/2_3023-monthly_gblstkidx.html [2/28/14]

2 - money.cnn.com/2014/02/28/investing/stocks-markets/ [2/28/14]

3 - ncsl.org/research/labor-and-employment/national-employment-monthly-update.aspx [3/3/14]

4 - bloomberg.com/news/2014-03-03/consumer-spending-in-u-s-rose-0-4-in-january-incomes-up-0-3-.html [3/3/14]

5 - briefing.com/investor/calendars/economic/ [2/14/14]

6 - marketwatch.com/economy-politics/calendars/economic [2/21/14]

7 - nasdaq.com/article/economic-report-summary-week-ending-22814-cm331513 [2/28/14]

8 - ism.ws/ISMReport/MfgROB.cfm [3/3/14]

9 - ism.ws/ISMReport/NonMfgROB.cfm [3/3/14]

10 - bloomberg.com/news/2014-02-26/traders-reject-lagarde-s-warning-as-volatility-falls-currencies.html [2/26/14]

11 - marketwatch.com/story/china-pmi-drops-to-8-month-low-2014-03-02 [3/2/14]

12 - main.omanobserver.om/?p=61436 [3/3/14]

13 - epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home [3/3/14]

14 - tinyurl.com/l9ogm6q [3/3/14]

15 - mscibarra.com/products/indices/international_equity_indices/gimi/stdindex/performance.html [3/1/14]

16 - money.cnn.com/data/commodities/ [3/1/14]

17 - online.wsj.com/mdc/public/npage/2_3050.html?mod=mdc_curr_dtabnk&symb=DXY [3/1/14]

18 - 247wallst.com/housing/2014/02/21/january-sales-of-existing-homes-at-18-month-low/ [2/21/14]

19 - reuters.com/article/2014/02/19/us-housing-starts-idUSBREA1I11V20140219 [2/19/14]

20 - freddiemac.com/pmms/archive.html?year=2014 [3/3/14]

21 - money.cnn.com/2014/02/03/investing/stocks-markets/ [2/3/14]

22 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F28%2F12&x=0&y=0 [2/28/14]

22 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F28%2F12&x=0&y=0 [2/28/14]

22 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F28%2F13&x=0&y=0 [2/28/14]

22 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F27%2F09&x=0&y=0 [2/28/14]

22 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F27%2F09&x=0&y=0 [2/28/14]

22 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F27%2F09&x=0&y=0 [2/28/14]

22 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F27%2F04&x=0&y=0 [2/28/14]

22 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F27%2F04&x=0&y=0 [2/28/14]

22 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F27%2F04&x=0&y=0 [2/28/14]             

23 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/3/14]

MONTHLY QUOTE

“Yesterday is not ours to recover, but tomorrow is ours to win or to lose.”
 

– Lyndon B. Johnson

MONTHLY TIP

Saving for retirement should take priority over saving for college. Remember, there is no retiree financial aid.

MONTHLY RIDDLE

What possesses a foot, yet no legs?

Last month’s riddle:
I am round, touch the ground, and I am best under pressure. What am I?

Last month’s answer:

A tire.

February 2014

THE MONTH IN BRIEF
Headwinds certainly increased in January as subpar earnings and anxieties about emerging markets unnerved Wall Street. January ended up as the poorest month for stocks since May 2012, with the S&P 500 losing 3.56% and many other global benchmarks retreating. Rough winter weather impeded homebuyers and jobseekers, but not consumer spending. On the NYMEX, gains and losses varied widely with natural gas and coffee futures jumping north. As many analysts expected, the Federal Reserve decided to further reduce its monthly asset purchases.1

DOMESTIC ECONOMIC HEALTH
At the Fed, the Ben Bernanke era ended with another taper. On January 31, the central bank announced it would buy $65 billion in bonds a month ($35 billion in Treasuries, $30 billion in mortgage-linked securities) starting in February, which was $10 billion below the previous amount.2

That wasn’t the only reduction investors heard about in January. Hiring had fallen off in December, with employers adding just 74,000 jobs; the awful weather gripping much of the country may have influenced that figure, as well as the dip in the jobless rate to 6.7% (347,000 people left the job hunt).3

The Institute for Supply Management’s factory PMI slipped to 51.3 in January, down from 56.5 in December. Early in January, ISM’s service sector PMI had come in at 53.0 for December, a dip of 0.9 points from the November mark. Additionally, durable goods orders sank 4.3% in the final month of 2013.4,5,6

Inflation resurfaced in December, it turned out: the Consumer Price Index moved 0.3% north (core CPI rose 0.1%) and the Producer Price Index advanced 0.4% (with a gain of 0.3% in core PPI).7

Good news also arrived. Consumer spending was up 0.4% in December – twice the gain economists polled by Briefing.com had forecast – and by the federal government's initial estimate, the economy grew 3.2% in the fourth quarter. The last month of the year also witnessed improvements in retail sales (0.2%, 0.7% with auto buying factored out) and industrial production (0.3%). Thanks in part to a $53.2 billion December surplus, the federal budget deficit was 41% smaller at the end of 2013 than it had been a year before.6,7

Consumer confidence also strengthened. The Conference Board’s index rose to 80.7 in January from December’s reading of 77.5, and the University of Michigan’s consumer sentiment index gained 0.8 points on the month to reach 81.2.6

Lastly, President Obama authorized the Treasury to create a new type of retirement account – the MyRA, a principal-protected savings vehicle governed by Roth IRA rules that would serve as a kind of “starter” Roth IRA for workers unable to enroll in employer-sponsored retirement plans. As mandatory enrollment won’t be a feature of the MyRA, analysts aren’t sure it will make much of a dent in the retirement savings problem.8

GLOBAL ECONOMIC HEALTH
As January ended, the biggest selloff in emerging market currencies in 5 years was underway. Argentina’s peso lost 19% of its value last month; South Africa’s rand fell 5.9% against the dollar while Turkey’s lira slipped 5.1% versus the greenback. In some emerging market countries, real yields were too low to attract capital necessary to address current account deficits. At month’s end, the real yield for South Africa was 1.4% (compared to 2.0% in the past decade) and Mexico’s real yield was 0.1%. Turkey, India and South Africa all hiked interest rates in January.9

China’s manufacturing sector had clearly slowed. The country’s official factory PMI hit a 6-month low of 50.5 in January, and the HSBC PMI for China fell a point to 49.5 (contraction territory). In better news out of the region, Markit’s manufacturing PMI for Japan hit 56.6, the best reading since February 2006.10,11

Markit’s eurozone factory PMI came in at 54.0 in January, which was a better reading than in any month since May 2011. Annualized consumer inflation in the eurozone decreased to 0.7% last month, triggering concerns about deflation; eurozone unemployment remained at 12.0%.11,12

WORLD MARKETS
Most of the big benchmarks retreated last month. The Asia Dow lost 5.70%, the Europe Dow 2.78% and the Global Dow 3.86%. MSCI’s Emerging Market Index and World Index respectively lost 6.60% and 3.77%, while the DJ STOXX 600 retreated 1.75%. In Asia, the Nikkei 225 lost 8.45%, the Shanghai Composite 3.92%, the Hang Seng 5.45%, the Kospi 3.49% and the Sensex 3.10%; the Jakarta Composite rose 3.38% and Pakistan’s KSE 100 climbed 6.03%.1,13

In the Americas, the TSX Composite advanced 0.54% and the MERVAL 11.64% while the Bovespa sank 7.51% and the IPC All-Share lost 4.32%. Europe saw the following losses: FTSE 100, 3.54%; CAC 40, 3.03%; DAX, 2.57%, RTSI, 9.82%. Ireland’s ISEQ rose 2.49% last month; Italy’s FTSE MIB gained 2.38%.1i COmposite : the TSX Composite (-2.30%), the  gan'

COMMODITIES MARKETS

Natural gas futures jumped 15.48% on the NYMEX last month. Other major energy futures lost ground: oil slipped 1.31%, unleaded gasoline 5.70% and heating oil 2.62%. NYMEX crude ended the month at $97.46.14,15

Among metals, COMEX gold gained 3.80% to finish January at $1,245.60; silver futures rose 1.14% and platinum futures 0.52%. Copper, on the other hand, fell 6.49% in January.14,15

Coffee made the month’s other big ascent, climbing 13.52%. Other crop futures advancing on the COMEX: corn, 3.21%; cocoa, 6.83%; cotton, 1.41%. Declining crop futures included soybeans (2.59%), sugar (5.24%) and wheat (7.84%). The U.S. Dollar Index ended January at 81.31, representing a 1.59% monthly gain.14,16

REAL ESTATE
Aggravating winter storms didn’t quite arrest home buying in December. The National Association of Realtors said existing home purchases rose 1.0% in that month. The Census Bureau, however, estimated a 7.0% drop in new home sales. Existing home sales improved 9.1% in 2013 (the best year since 2006) and new home sales were up 4.5% for the year. The S&P/Case-Shiller Home Price Index showed a 13.7% overall yearly gain (20 metro markets) in November.6,17,18

Looking to the near future, NAR said pending home sales dropped 8.7% for December (perhaps weather was a major factor). The Census Bureau recorded a 3.0% decline in building permits for December, along with a 9.8% retreat in housing starts.6,7

Fixed-rate mortgages were a bit cheaper in December – a look at Freddie Mac’s December 26 and January 30 Primary Mortgage Market Surveys shows the average rate on the 30-year FRM descending from 4.48% to 4.32%, and from 3.52% to 3.40% for the 15-year FRM. Average rates on 5/1-year ARMs rose 0.12% to 3.12%; average rates on 1-year ARMs ticked down 0.01% to 2.55%.19,20

LOOKING BACK…LOOKING FORWARD
At the closing bell on January 31, the most-watched U.S. indices had not quite corrected from 2013 peaks, but were still notably beneath them: DJIA, 15,698.85; NASDAQ, 4,103.88; S&P 500, 1,782.59. The Russell 2000 lost 2.82% on the month, wrapping up January at 1130.88. This won’t surprise anyone: the CBOE VIX advanced 34.18% in January, ending the month at 18.41. The Dow Jones Internet Index and NASDAQ Biotech Index pulled off January gains – the former rose 6.90%, the latter 8.41%.1

Sources: online.wsj.com, bigcharts.com, treasury.gov - 1/31/141,21,22

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

February began with more struggles for stocks: a 326-point drop for the Dow largely in response to the major January retreat of ISM’s key manufacturing PMI. When the dust settled on the market’s worst day of the young year, the S&P 500 was almost 6% below its December 2013 all-time peak. The big question here: is this retreat a sign of market normalcy or representative of something worse? How many investors will believe that this pullback is warranted and stick with stocks, and how many will turn to “safe havens” with a glance at emerging economies? January’s employment report may be a key test. If it shows the economy adding 200,000 or more jobs, investors worldwide might breathe easier. They also might be comforted by other (presumably solid) American economic indicators as the month unfolds.23

UPCOMING ECONOMIC RELEASES: The roll call of data for the remainder of February: January’s ISM service sector PMI and the January ADP employment change report (2/5), January Challenger job-cuts data (2/6), the January employment report from the Labor Department (2/7), December wholesale inventories (2/11), December business inventories and January retail sales (2/13), the University of Michigan’s preliminary February consumer sentiment index and January industrial output (2/14), February’s NAHB housing market index (2/18), January housing starts and building permits, January’s PPI and the January Fed policy meeting minutes (2/19), the January CPI and the Conference Board’s January leading indicator index (2/20), January existing home sales (2/21), the Conference Board’s January consumer confidence index and December’s Case-Shiller home price index and FHFA housing price index (1/23), January new home sales (2/26), January durable goods orders (2/27), and then the University of Michigan’s final February consumer sentiment index, January pending home sales and the second estimate of Q4 GDP (2/28). January’s consumer spending numbers will come out on March 3.

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If you would like us to add them to our distribution list, please reply with their address.
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<<RepresentativeDisclosure>>

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is not a solicitation or recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. The Asia Dow measures the Asia equity markets by tracking 30 leading blue-chip companies in the region. The Europe Dow measures the European equity markets by tracking 30 leading blue-chip companies in the region. The Global Dow is a 150-stock index of corporations from around the world created by Dow Jones & Company. The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The MSCI World Index is a free-float weighted equity index that includes developed world markets, and does not include emerging markets. The STOXX Europe 600 Index is derived from the STOXX Europe Total Market Index (TMI) and is a subset of the STOXX Global 1800 Index. Nikkei 225 (Ticker: ^N225) is a stock market index for the Tokyo Stock Exchange (TSE). The Nikkei average is the most watched index of Asian stocks. The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange. The Hang Seng Index is a freefloat-adjusted market capitalization-weighted stock market index that is the main indicator of the overall market performance in Hong Kong. The Korea Composite Stock Price Index or KOSPI is the major stock market index of South Korea, representing all common stocks traded on the Korea Exchange. The BSE SENSEX (Bombay Stock Exchange Sensitive Index), also-called the BSE 30 (BOMBAY STOCK EXCHANGE) or simply the SENSEX, is a free-float market capitalization-weighted stock market index of 30 well-established and financially sound companies listed on the Bombay Stock Exchange (BSE). The IDX Composite or Jakarta Composite Index is an index of all stocks that are traded on the Indonesia Stock Exchange (IDX). Karachi Stock Exchange 100 Index (KSE-100 Index) is a stock index acting as a benchmark to compare prices on the Karachi Stock Exchange (KSE) over a period. The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization. The MERVAL Index (MERcado de VALores, literally Stock Exchange) is the most important index of the Buenos Aires Stock Exchange. The Bovespa Index is a gross total return index weighted by traded volume & is comprised of the most liquid stocks traded on the Sao Paulo Stock Exchange. The Mexican IPC index (Indice de Precios y Cotizaciones) is a major stock market index which tracks the performance of leading companies listed on the Mexican Stock Exchange. The FTSE 100 Index is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalization. The CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. The DAX 30 is a Blue Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The RTS Index (abbreviated: RTSI, Russian: Индекс РТС) is a free-float capitalization-weighted index of 50 Russian stocks traded on the Moscow Exchange. The ISEQ Overall Index is a capitalization-weighted index of all official list equities in the Irish Stock Exchange, excluding U.K.-registered companies. The FTSE MIB (Milano Italia Borsa) is the benchmark stock market index for the Borsa Italiana, the Italian national stock exchange. The US Dollar Index measures the performance of the U.S. dollar against a basket of six currencies. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results.  Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

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