Weekly Market Recap
May 21, 2012
• Greece was unable to form a coalition government.• The FOMC left forward guidance unchanged.
• CPI: 2.30% y-o-y; Core CPI: 2.31% y-o-y.• Retail Sales rose less than expected.• Housing Starts beat consensus estimates.• Industrial Production was stronger than expected.• Next Week: New Home Sales, Durable Goods.
Thought of the Week
The situation in Europe remains unresolved and fearsover a hard landing in China continue to mount, whichhas driven investors out of stocks and in to bonds andcash. As shown in this week’s chart, China’s economicdata has weakened this year, and although they may beheaded for a slowdown, it does not appear they areheaded for a hard landing. On the other hand, U.S.economic data continues to improve, and to an extent itappears that the U.S. and China have “traded places”;the pace of U.S. economic growth is accelerating, whilethe pace of China’s economic growth is slowing. Thus,given a backdrop of a stronger U.S. economy andattractive equity valuations, investors could benefit froman investment in equities, or at least by takingadvantage of this opportunity to ensure their portfoliosare balanced.
Question of the week:
Used vehicle prices increased 1.5% in April; when wasthe last time prices rose this much on a month-over-month basis?
Prior week's question:
According to the JOLTS survey, how may job openingswere there as of the end of March?
Answer to prior week's question:
According to the JOLTS survey, there were 3.7 million job openings in March, up significantly from a yearearlier.
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12,56012,21812,82112,369Dow Jones 30
3.252.452.132.1710 Year Municipal
3.171.871.841.7010 Year Treasury
0.560.240.260.292 Year Treasury
0.250.250.250.25Fed Funds Target
-1.91-0.63-5.90-4.74MSCI - EAFE
1 week YTD
4.604.074.013.9630 Year Mortgage
0.290.640.450.436 Month CD
81.3676.9479.8879.26¥ per $
1.611.551.611.58$ per £
1.431.301.291.27$ per €
109.801.5317.5913.37Russell 1000 Growth
74.382.5815.0910.83Russell 1000 Value
Wgt AvgMkt Cap(Bill)DividendYieldP/ETrailingP/EForwardIndexCharacteristics
S&P 500 Sector Returns
S & P 5 0 0 F i n a n c i a l s M a t e r i a l s T e c h n o l o g y C o n s u m e r D i s c r . E n e r g y I n d u s t r i a l s H e a l t h C a r e U t i l i t i e s C o n s u m e r S t a p l e s T e l e c o m - 0 . 3 - 1 . 3 - 1 . 4 - 2 . 5 - 4 . 2 - 4 . 6 - 5 . 0 - 5 . 0 - 6 . 5 - 7 . 0- 4 . 2
S & P 5 0 0 E n e r g y M a t e r i a l s U t i l i t i e 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 F i n a n c i a l s T e c h n o l o g y C o n s u m e r D i s c r . T e l e c o m 8 . 8 8 . 2 8 . 2 6 . 4 4 . 7 4 . 0 1 . 8 - 0 . 5 - 1 . 7 - 6 . 9 3 . 9
1 w e e k Y T D
1 w e e k
Y T D
Note: All returns represent total return including dividends.
Chart of the Week
Trading Places: The U.S. and China
YTD year-over-year % change
-10%-5%0%5%10%15%20%25%30%Housing Starts Exports Imports Vehicle SalesU.S. China