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JPM Weekly Mkt Recap 8-13-12

JPM Weekly Mkt Recap 8-13-12

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09/09/2013

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MARKET
INSIGHTS
Weekly Market Recap
August 13, 2012
Headlines
• Chinese economic data was disappointing in July.• GOP presidential nominee Mitt Romney picked PaulRyan as his vice presidential choice.
Economic News
• The trade deficit shrank more than expected in June.• Jobless claims fell to 361,000.• Next Week: Retail Sales, PPI, Industrial Production,Housing Starts, Consumer Sentiment.
Thought of the Week
The housing market may be showing signs of life, asinventories seem to have stabilized and prices havebegun to rise. However, this has occurred as other areasof the U.S. economy appear to be weakening, causingmany to question the sustainability of this recentimprovement. That being said, as shown in this week’schart, consumer demand for mortgages is increasing;the number of loan officers reporting stronger demandfor mortgages has exceeded those reporting weakerdemand for four consecutive quarters, which couldprovide support for the housing market going forward.Thus, despite mixed numbers on the U.S. economy,progress in housing and decent report on light vehiclesales for July suggest that the cyclical sectors areimproving, which should allow the economy to continuegrowing at a moderate pace.
Question of the week:
According to the JOLTS survey, the number of jobopenings hit a high for the recovery in June. When wasthe last time job openings were at their current level?
Prior week's question:
High yield bonds are currently yielding approximately6.8%; what was the highest yield seen over the pastyear?
Answer to prior week's question:
The highest yield seen over the past year was 10.15%,which occurred on October 4, 2011.
Please see important disclosure on next page.
660741788802Russell 2000 2,3812,6052,9683,021Nasdaq 1,1211,2581,3911,406S&P 500 10,72012,21813,09613,208Dow Jones 30
8/10/1112/30/118/3/128/10/12Index Levels FridayClosePriorWeekYearEndYearAgo
8.568.366.776.85High Yield 2.892.452.082.1310 Year Municipal 2.141.871.581.6510 Year Treasury 0.180.240.240.262 Year Treasury 0.250.250.250.25Fed Funds Target
Bond Rates
11.3910.092.672.55Asia ex-Japan 2.273.933.743.21Japan 7.0411.701.301.35Europe ex-UK 9.118.071.971.37United Kingdom 7.308.851.951.72MSCI - EAFE 13.2813.281.151.15S&P 500
USDLocalUSDLocalMarket Returns 1 week YTD
3.253.253.253.25Prime Rate 4.374.073.753.7630 Year Mortgage 0.430.640.440.426 Month CD
8/10/1112/30/118/3/128/10/12Consumer Rates FridayClosePriorWeekYearEndYearAgo
3.673.263.513.65Gasoline 82.8998.8391.4092.87Crude Oil 1772.001531.001602.001618.50Gold
Commodities
76.5076.9478.6078.19¥ per $ 1.611.551.561.57$ per £ 1.421.301.231.23$ per €
Currency
1.231.4522.3617.19Russell 2000 114.811.6317.6515.15Russell 1000 Growth 90.792.5913.6711.68Russell 1000 Value 115.372.2215.6813.00S&P 500
Wgt AvgMkt Cap(Bill)DividendYieldP/ETrailingP/EForwardIndexCharacteristics
S&P 500 Sector Returns
-10123
   S   &   P   5   0   0   U   t    i    l    i   t    i   e   s   C   o   n   s   u   m   e   r   S   t   a   p    l   e   s   H   e   a    l   t    h   C   a   r   e   T   e    l   e   c   o   m   F    i   n   a   n   c    i   a    l   s   C   o   n   s   u   m   e   r   D    i   s   c   r .   I   n    d   u   s   t   r    i   a    l   s   T   e   c    h   n   o    l   o   g   y   E   n   e   r   g   y   M   a   t   e   r    i   a    l   s   2 .   9   2 .   5   2 .   3   1 .   4   0 .   8   0 .   7   0 .   6   0 .   5  -   0 .   4  -   0 .   8   1 .   2
06121824
   S   &   P   5   0   0   E   n   e   r   g   y   U   t    i    l    i   t    i   e   s   M   a   t   e   r    i   a    l   s   I   n    d   u   s   t   r    i   a    l   s   C   o   n   s   u   m   e   r   S   t   a   p    l   e   s   H   e   a    l   t    h   C   a   r   e   C   o   n   s   u   m   e   r   D    i   s   c   r .   F    i   n   a   n   c    i   a    l   s   T   e   c    h   n   o    l   o   g   y   T   e    l   e   c   o   m   2   3 .   9   1   8 .   5   1   6 .   1   1   5 .   4   1   3 .   0   1   1 .   5   1   0 .   3   8 .   9   6 .   5   5 .   5   1   3 .   3
   1   w   e   e    k   Y   T   D
Style Returns
1.71.71.6S 1.41.82.1M 0.91.21.5L GBV
   1   w   e   e    k
9.09.19.1S 10.511.011.4M 13.513.312.5L GBV
   Y   T   D
Note: All returns represent total return including dividends.
Chart of the Week
Stronger Mortgage Demand Could Be a Tailwind for Housing
Net % of respondents reporting stronger demand for prime mortgages
-80%-60%-40%-20%0%20%40%60%'07 '08 '09 '10 '11 '12
3Q12: 52.5%

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