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Monthly Archives: May 2009

Higher Expectations

After improving noticeably (and rapidly) over the last two weeks months, both the financial markets and U.S. economy have arrived at essentially the same place: higher expectations. In early 2009, financial market participants found acceptable that the U.S. economy merely stopped getting worse, or that the U.S. government had a viable plan to address housing, the banking system and the mortgage crisis, and that the Federal Reserve was not repeating the monetary policy mistakes of the 1930’s. Now, as May turns into June, and the economy enters the 17th month of the recession that began in December 2007 (making it the longest recession sicne the early 1930’s), financial markets are no longer satisfied with an economy that has "stopped getting worse." The market wants to see real sustainable growth in the economy – not just less negative readings. On the policy front, the market now wants to see the proof that the government’s policies on housing, the banking system, and the mortgage crisis working. On monetary policy, markets have come around to the view that the Fed has not repeated the monetary policy mistakes made in the early 1930’s that deepened the Great Depression, but now are beginning to worry more about the Fed’s "exit strategy", and its potential impact on inflation.

To see the rest of this article, please click on the link below:

http://www.mwboone.com/library/Weekly_Economic_Commentary_5_26_09.pdf

Geopolitical Risks Return

Geopolitical events have been reasserting an influence on the markets after a brief honeymoon period with a new U.S. administration for foreign leaders to assess and a global financial crisis to deal with.

Last week we witnessed India’s election igniting a powerful global stock market rally on Monday, May 18 when ruling Congress Party emerged victorious. If the hard-line nationalist main opposition party had won, Indian restraint against Pakistan would not be assured in the event of another large-scale militant attack like the one that took place in Mumbai in November 2008. With the suprisingly strong showing by India’s ruling party, India is staying on the sidelines and looking to the United States to manage Pakistan’s jihadist problems.

To see the rest of this article, please click on the link below:

http://www.mwboone.com/library/Weekly_Market_Commentary_5_26_09.pdf

Crisis Conditions Index

The LPL Financial Research Crisis Index (CCI) is an objective and transparent measure of how the conditions are evolving relative to our base case, bear, and bull cases defined in our Outlook 2009 publication. This weekly index is not intended to be a leading index or predictive of where conditions are headed, but merely a coincident measure of where they are right now. We want to track the conditions in real time to aid investment decision making. There are thousands of indicators-some lead the economy, some lag, while others merely offer a lot of statistical noise. We chose to create our own index tailored to the current environment to provide the clearest and most useful way to track how conditions are aligned with the expectations embedded in our investment recommendations.

To view the rest of this article, please click on the link below:

http://www.mwboone.com/library/Crisis_Condition_Index_5_20_09.pdf

Too Great Expectations

Lasty week’s 5% loss for the S&P 500 almost fully reversed the gain of the prior week. Over the preceding nine weeks stocks rose steadily as economic data proved stronger than expected. As last week’s performance attests, market participants’ greater expectations now leave room for disappointment and the return of volatility.

Around the turning points during the healing is typically uneven – some parts of the economy begin to show signs of improvement while others are still worsening. The early signs of improvement signaling the bottom is near are usually welcomed with a rally in stocks and corporate bonds despite the mixed economic data. The rally often ends when investors get impatient waiting for improvement to show up in all areas. As expectations get too great some of the data is bound to disappoint.

To see the rest of this article, please click on the link below:

http://www.mwboone.com/library/Weekly_Market_Commentary_5_20_09.pdf

Consumer Spending a Mirage?

The title of our most recent Weekly Economic Commentary was "What’s Next"? In the commentary, we posed some rhetorical questions about the economy and markets that market participants may be asking themselves over the next few weeks and months. We didn’t necessarily have answers for the questions we posed, but asked them to help frame our analysis of the economy, policy, anf financial markets over the near term.

The questions we asked last week remain valid (and many remain unanswered), and not suprisingly last week’s flow of information on the markets, economy, and policy has prompted even more questions.

To see the rest of this article, please click on the link below:

http://www.mwboone.com/library/Weekly_Economic_Commentary_5_19_09.pdf

How Does the Stimulus Plan Affect You? It’s Good to Get Some Advice Now

The biggest benefit from the $787.2 billion federal stimulus package will hopefully be a noticeable improvement in the nation’s economy. But on an individual level, it’s wise to check if you might be eligible for benefits in health care, education, various tax credits and housing.

A visit with a tax expert or a financial adviser such as a Certified Financial Planner™ professional can help you determine the best ways to use the following provisions that may affect you. It’s also a good idea to get a financial checkup in an uncertain economy for the following reasons:

 

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Why Maintaining Your Credit Score Becomes Even More Important During the Continuing Credit Crunch

It’s always a good idea to be vigilant about your credit score, but even if borrowing loosens up a bit in 2009, you still need to do everything necessary to keep your credit score high.

Fair Isaac, the company that created the FICO score, has been working on a new version of its landmark credit scoring method that might have serious consequences for you if you’re planning on borrowing for a home or establishing any other new credit in 2009.

The new version of FICO is going to be particularly focused on your balances, not only on your on-time payment records. Your top priority under this new system: Get balances down.

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What’s Next?

Last week was an unusually eventful one for financial markets, with the long awaited release of the U.S. governement’s "stress tests" for the nation’s largest 19 banks, as well as the important April employment report released at the end of the week. Earlier in the week, markets digested:

*  Better than expected reports on April retial sales,

*  March construction,

*  The service sector economy in April,

*  Existing home sales in March,

*  Jobless claims in early May

To see the rest of the article, please click on the link below:

http://www.mwboone.com/library/Weekly_Economic_Commentary_5_13_09.pdf

Twin Engines

The stock market, measured by the S&P Index, posted another gain last week – the eighth weekly gain of the past nine weeks. The steady improvement in the economic, credit market, labor market, and profit outlook have helped to boost investor confidnence. While the global economy remains stalled in recession, the twin engines of global growth have started to rev up: the United States and China.

To see the rest of this article, please click on the link below:

http://www.mwboone.com/library/Weekly_Market_Commentary_5_11_09.pdf

Investment products and services offered through MWBoone and Associates, LLC

At MWBoone and Associates, LLC, we utilize the services of LPL Financial to hold our client accounts and perform due diligence and review and approve investment products for us.  Through our independent relationship with LPL we offer common and preferred stocks, hybrid and convertible securities, mutual funds, Exchange Traded Funds, options, CDs, municipal, corporate, agency and government bonds, Separately Managed Account and money market instruments.   Insurance related products and services include life, disability and long term care insurance and both fixed and variable annuities.  Alternative Investments include gold and precious metals, commodities, futures, public and private real estate investment trusts and limited partnerships, oil and gas, private equity, hedge funds and leasing programs.  Educational account options include 529s and UGM accounts.  Retirement accounts offerings include 401(k)s, SEPs, SIMPLEs, 403(b) TSAs, IRAs and Roth IRAs.  

Here is a short video highlighting the LPL Financial story:  


http://lplfinancial.lpl.com/Global_Pages/News_and_Media_Center/Video_-_Where_Investors_Goals_Come_First.htm