subject: Weekly Market Update: January 22, 2010 [print this page] The Economy The Economy
Tighter proposed banking regulation from the U.S. and initialsteps to scale back lending by China, combined with gloomyeconomic data, resulted in uncertainty about the ongoingrecoveryyet another bump on what we expect will be along and winding road to recovery.
The Obama administration proposed the "Volcker Rule,"legislation to limit the size and trading practices of banks.
The U.S. Index of Leading Economic Indicators gained1.1%, fueled by an increase in building permits forDecember.
The Philadelphia Fed Index of manufacturing activitydropped to 15.2, which was weaker than expected andbelow its median level of 18.0.
U.S. jobless claims rose unexpectedly; consensus estimatespredicted that claims would fall.
U.S. housing starts fell 4% in December, and total housingstarts for 2009 were the lowest on record dating back to1959.
European Central Bank President Jean-Claude Trichetwarned that the euro-zone recovery would like be unevendespite government stimulus efforts.
Economic Calendar
Existing home sales and Dallas Fed Manufacturing Activitywill be released January 25.
Consumer confidence and the Richmond Fed ManufacturingIndex will be released January 26.
New home sales and the Federal Open Market Committee'srate decision will be released January 27.
Initial jobless claims and durable goods will be releasedJanuary 28.
Gross domestic product, employment costs and the ChicagoPurchasing Managers Index will be released January 29.
Stocks
Global markets fell on anxiety that additional regulation andtighter monetary policies may hinder the fragile recovery.
In the U.S., small caps outperformed their large-capbrethren. Growth stocks outperformed their valuecounterparts.
In the U.S., Telecommunications was the best-performingsector, while Materials lagged behind the broader markets.
In the UK, investors flocked to defensive sectors; leaderswere Healthcare, Utilities, Telecommunications andConsumer Staples. Materials and Financials lagged.
In Europe, Healthcare, Consumer Staples and InformationTechnology led while Materials and Financials lagged.
Oil and gold both fell at the end of the week in response toObama's plan to regulate banks and China's possible rateincrease.
Bonds
Global government bonds rallied on weaker economic dataand the announcements from China and President Obama.
Demand for U.S. Treasuries rose as investors worried aboutthe impact of increased regulation on economic growth.
Corporate bonds fell as investors snapped up governmentbonds.
High-yield and emerging-market debt fell as investors soughtsafety in government bonds.
The Numbers as of Friday 1
Week YTD 1 Year Friday's
Jan 22, 2010 Close
Global Equity Indices
MSCI World ($) -2.4% -0.1% 40.5% 1166.9
MSCI EAFE ($) -2.4% -0.3% 44.4% 343.2
MSCI Emerging Mkts ($) -2.9% -0.8% 90.8% 981.2
US & Canadian Equities
Dow Jones Industrials ($) -4.1% -2.4% 25.2% 10173.0
S&P 500 ($) -3.9% -2.1% 31.9% 1091.8
NASDAQ ($) -3.6% -2.8% 50.5% 2205.3
S&P/ TSX Composite (C$) -2.9% -3.4% 33.7% 11343.4
UK & European Equities
FTSE All-Share () -2.7% -1.7% 33.5% 2714.1
MSCI Europe ex UK () -2.9% -2.4% 32.3% 897.4
Asian Equities
Topix (yen) -2.6% 3.7% 18.2% 940.9
Hong Kong Hang Seng ($) -4.3% -5.2% 63.7% 20726.2
MSCI Asia Pac. Ex-Japan ($) -4.6% -2.2% 82.5% 407.3
Latin American Equities
MSCI EMF Latin America ($) -4.5% -4.3% 96.0% 3938.3
West Texas Intermediary Spot -4.8% -6.5% 75.6% 74.2
Gold Spot Price -3.3% -0.3% 27.6% 1093.4
Global Bond Indices ($)
Barclays Capital Global Agg. 0.3% 1.5% 8.1% 176.4
JPMorgan Emerging Mkt Bond -0.3% 0.9% 29.3% 470.6
10-Year Yield Change (basis points*)
US Treasury -7.7 -24.0 100.5 3.60%
UK Gilt -1.7 -9.4 41.6 3.92%
German Bund -4.7 -17.2 10.7 3.22%
Japan Govt Bond 0.0 3.5 9.0 1.33%
Canada Govt Bond -12.8 -24.2 61.6 3.37%
Currency Returns
US$ per euro** -1.8% -1.3% 1.1% 1.4131
Yen per US$ -1.0% -1.1% 1.1% 89.88
US$ per ** -0.9% -0.8% 10.4% 1.6115
C$ per US$ 2.8% -0.2% -13.2% 1.0584
Source: Bloomberg, total return. Equity returns are index price only. *100basis points = 1 percentage point. **A gain in US$ per euro and = adecline in the dollar, and vice-versa.
Weekly Market Update: December 18, 2009
Weekly Market Update: January 22, 2010
Index returns are for illustrative purposes only and do not represent actual fund performance.
Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.Diversification may not protect against market risk. There are risks involved with investing, including loss of principal.
This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice. This information is for educational purposes only.
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John Jastremski, Jeremy Keating, Erik J Larsen, Frank Esposito, Patrick Ray, Robert Welsch, Michael Reese Philip Catalan, Brent Wolf, Andy Starostecki, The Retirement Group, AT&T, Verizon
