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Monthly Archives: September 2009

Extended Period

The dollar rose about 1% late last week, the most sizable move to the upside in a month, after hitting the lowest level in a year on Wednesday. The rise in the dollar was accompanied by a move toward high quality investments driving declines in stocks and commodities. However, this bounce is likely to be short-lived with the dollar returning to the downward trend for an extended period.

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September Labor Market Data will Dominate the Week

Financial markets took a breather last week after enduring one of the worst weeks for economic data (relative to raised expectations) in many months. Reports on durable goods orders, home sales, leading indicators and consumer sentiment data all came in at or below expectations. Overlooked in the week, may have been the better news on the labor market in September, as jobless claims fell again and the employment components of both Richmond and Kansas City Reserve surveys indicating that the labor market continued to improve in September.

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The Strength of Partnership

The need for objective advice has never been greater. Amid an ever-changing investment landscape investors need an expert and experienced partner who can guide them through the intricacies of investing and financial planning .

As a long term investor, you are faced with a wide array of financial considerations. You may need to provide financial assistance for a child’s college education or help support an aging parent. In addition, you must prepare for your own retirement and consider what’s to be done with your estate.

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Anything But Cash

Virtually every market posted gains last week, including: U.S. stocks, foreign stocks, real estate, commodities, and precious metals – only bonds were slightly lower following three weeks of gains. The markets are well off of their lows. In recent months, market participants’ behavior has been defined by the mantra "anything but cash". Since their peak, money market fund outflows have totaled nearly $500 billion as that cash has been put to work in the markets.

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Markets Finally Acknowledge the Data; FOMC on Tap

Last week yet another stellar week for economic reports – which generally confirmed that the economy is on track for solid growth in Q3 2009 – finally began to attract some attention from financial markets. The S&P 500 posted a 2.5% gain for the second consecutive week, while the yield on both the two-year and ten-year U.S. Treasury notes climbed noticeably from the prior week. This suggests that maybe, financial market participants (especially in Treasury bond market) are beginning to come to the realization that the economic recovery is here to stay.

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What a Difference a Year Makes

What a difference a year makes.  In mid-September of last year, Lehman Brothers filed for bankruptcy and precipitated the peak of the financial crisis.  The effects were felt quickly. Within a few days of Lehman’s bankruptcy, a money market fund broke the buck and money markets stopped buying the commercial paper of financial institutions. In the following weeks, even the largest and most creditworthy of U.S. corporations were either unable to borrow or were forced to pay handsomely to do so. In the aftermath, the whole financial system seized up. This tipped the sluggish economy into recession and the markets into a tailspin.


One Year Ago and What it Means Now

On September 15, 2008, Lehman Brothers filed for bankruptcy. That was the event that precipitated the peak of the financial crisis. Let’s not just look back at what event meant for the markets, but also forward to what it means today and what the consequences of the financial crisis may be for the markets in the years to come.

While GDP growth was below average in the first half of 2008, it was below average in the first half of 2008, it was positive and credit markets were functioning. The TED spread began 2008 at 1% then doubled around the time Bear Stearns was bailed out when JP Morgan absorbed it with the Federal Reserve guaranteeing a lot of the toxic assets. The potential crisis appeared to be averted and the TED Spread narrowed to 1% again. During the summer the rate rose again this time as Fannie and Freddie – the two entities that make possible about half of the home loans in America – were bailed out and effectively nationalized…………

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Cash for Clunkers a Dominant Theme in This Week’s Economic Data Reports

As the first full week of September begins, market participants are likely to continue to dismiss economic data showing that economic growth (as measured by real gross domestic product) returned in Q3 2009, and beyond persist. Due in part to the impact of the "cash for clunkers" program, the deluge of economic data due out this week in August and September is not likely to provide the market a clearer picture of the economy in Q4 and beyond. As such, we expect the economic data to largely be ignored by market particpants, who will likely be more focused on the beginning of Q3 earnings preannouncement season, a potential trade war with China, the ongoing policy wrangling in Washington, and the one year anniversary of the collapse of Lehman Brothers.

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Markets Ignore a Solid Week of Data; Macro Issues on Tap this Week

Last week, financial markets behaved as they normally do during the last full week of summer – i.e. they went nowhere fast – despite another great slate of economic data. Looking ahead, with the relatively light economic calendar this week ( the only key reports due out this week are the weekly jobless claims report and the July merchandise trade report); the market’s focus may turn to more "macro" issues. This week is full of just those issues, beginning with the release of both the Fed’s Beige Book – qualitative assessment of the economy since the last Federal Open Market Committee (FOMC) meeting, and the OPEC meeting in Vienna, Austria on Wednesday. In addition, the return of Congress and the President to Washington will kick off what is likely to be a contentious fall of legislative policy debate that has the potential to move markets.

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The Rise of the Little Guy: LPL Financial Lures the Frustrated off Wall Street

Wall Street’s reputation couldn’t be much worse, and that’s very good for business at brokerages eager to snag defectors from bigger firms. One of the most aggressive outsiders in tapping dissatisfaction among brokers and investors since the credit crisis began is LPL Financial Holdings Inc. Its LPL Financial is nowhere close to a household name, but has grown into the fifth-largest U.S. brokerage firm, with 12,294 financial advisers, including more than 5,288 that have come aboard since 2006.

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