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Weekly Market Commentary 03112013

Weekly Market Commentary 03112013

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Weekly Market Commentary
Weekly Market Commentary

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Categories:Business/Law
Published by: monarchadvisorygroup on Mar 12, 2013
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Member FINRA/SIPCPage 1 o 3
Jeffrey Kleintop, CFA
Chief Market StrategistLPL Financial
LPL FINANCIAL RESEARCH
Weekly Market Commentary
March 11, 2013
Dow: The Great and Powerful
Highlights
The Dow Jones Industrial Average poweredits way to a new all-time high last week — ouryears ater the low point on March 6, 2009.The good news is that since WWII, only twoo the six bull markets that made it to theirourth anniversary ailed to make it to a fth.But the bad news is that we may need amodest pullback to sustain this bull market.Rather than signal a sign o weakness, pullbacksare oten the pauses that reresh the bull market.
The flm,
Oz: The Great and Powerful 
, the prequel to
The Wizard of Oz 
,premiered last week. The story o how the wonderul wizard overcame therisks and prevailed worked its magic on moviegoers and proved popular witha strong box ofce showing. In the same week, the Dow Jones IndustrialAverage (Dow) proved popular with investors as it powered its way to a newall-time high, as it overcame many risks to reach the ourth anniversary othe start o the current bull market rom the low point on March 6, 2009.The Dow stands 115% higher than it did our years ago. However, i we donot disregard the stocks behind the curtain o the great and powerul Dow,we see that this time the index no longer holds the stocks o AIG, Citigroup,and General Motors (among others) as it did at the prior peak on October 9,2007. The many changes to the 30 companies that make up the Dow makeit worthwhile to take a look at the stock market defned by broader indexeslike the NASDAQ and S&P 500.
 
On the 13th anniversary o the peak in the NASDAQ, this tech-heavy indexis still more than 35% away rom the peak reached on March 10, 2000.Nevertheless, this index has outperormed the Dow with a gain o 149%over the past our years.
 
The broadly diversifed S&P 500 Index is also outpacing the Dow witha gain o 125% since its March 2009 low and experiencing the second-best our-year bull market in history, second only to the bull that began onAugust 12, 1982[Figure 1].
01 Year2 Years3 Years4 Years16012080400S&P 500 Index Performance During All Bull Markets Since WWII06/13/4906/27/6210/07/6605/26/7010/03/7410/22/5708/12/8210/11/9003/11/0303/09/0912/04/87
1
This Is the Second-Best Four-Year Rally Ever
Source: Bloomberg data, LPL Financial 03/09/13The S&P 500 Index is an unmanaged index and cannot be invested into directly. Past perormance is no guaranteeo uture results.
The Dow stands 115% higher thanit did our years ago.
 
WEEKLY MARKET COMMENTARY
LPL Financial Member FINRA/SIPC Page 2 o 3
What is next or the bull market? The good news is that since WWII, onlytwo o the six bull markets that made it to their ourth anniversary ailed tomake it to a fth. Each o those our bull markets that extended through aourth year posted a double-digit return in the year leading up to the fthanniversary[Figure 2].
         0         3         /         0         9         /         0         9         0         3         /         3         0         /         0         9         0        7         /        1         0         /         0         9        1         0         /         3         0         /         0         9         0         2         /         0         8         /        1         0         0        5         /         0        7         /        1         0         0         6         /         0        7         /        1         0         0        7         /         0         2         /        1         0         0         8         /         2         6         /        1         0         0         3         /        1         6         /        1        1         0         6         /        1        5         /        1        1         0         8         /         0         8         /        1        1         0         8         /        1         9         /        1        1         0         9         /         0         9         /        1        1        1         0         /         0         3         /        1        1        1        1         /         2        5         /        1        1         0         6         /         0        1         /        1         2        1        1         /        1        5         /        1         2
20016012080400Number of Trading Days Since a 5% or More Pullback in S&P 500 Since Market Lowon 03/06/09
3
Stock Market Increasingly Due or a 5% or More Pullback
Source: S&P 500 Index Alert, LPL Financial 03/09/13The S&P 500 Index is an unmanaged index and cannot be invested into directly. Past perormance is no guaranteeo uture results.
S&P 500 Bull MarketsBeginEndAfter 1YearAfter 2YearsAfter 3YearsAfter 4YearsAfter 5YearsDuration(Months)
06/13/4908/02/5642.1%59.0%79.9%75.8%110.9%8610/22/5712/12/6131.0%43.7%36.8%75.7%-5006/27/6202/09/6631.3%54.9%57.9%--4310/07/6611/29/6832.9%41.7%---2605/26/7001/11/7343.7%59.7%---3210/03/7411/28/8038.1%67.3%55.3%64.7%76.0%7408/12/8208/25/8758.3%61.5%83.2%137.6%224.5%6012/04/8707/16/9021.4%56.9%---3110/11/9003/24/0029.1%45.4%71.1%77.9%127.3%11303/11/0310/09/0738.2%49.9%60.1%75.2%-55
03/09/09 current 68.6% 95.1% 102.6% 129.3% 4
Average ex-current36.6%54.0%63.5%84.5%134.7%58
Source: Bloomberg data, LPL Financial 03/09/13The S&P 500 Index is an unmanaged index and cannot be invested into directly. Past perormance is noguarantee o uture results.
 
2
Powerul Rally
The current bull market is not likely to be over, but the bad news is that we mayneed a pullback to sustain it. O the 18 pullbacks o 5% or more over the pastour years, the current rally, at 114 days without a 5% or more pullback, is oneo the longest o the bull market[Figure 3].

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