Since our last note, several economic reports have come out with mixed results. The most anticipated numbers regarding employment were especially disappointing. Net new jobs from the Nonfarm Payrolls report had just 115,000 versus the consensus forecast of 162,000. Unemployment ticked down again to 8.1 percent.(2) However, as has been the case quite often recently, that downtick was mainly attributed to people exiting the labor force.

The political situation in France and even more so Greece has markets trying to price in a renewed possibility of Greece either leaving the Eurozone or being kicked out. If this happens, Greece will have to issue new currency and could very likely default on portions of its sovereign debt.

While the markets grapple with this renewed uncertainty, corporate earnings reports for the 1st Quarter of 2012 are winding down. In a report by FactSet Research as of May 11, 453 companies of the 500 in the S&P 500 had reported with 72% reporting earnings above the mean estimate. The overall blended growth rate for the S&P 500 companies stood at 7.3%. The forward Price-to-Earnings ratio now stands at 12.2. This P/E ratio is below the average forward P/E over the past 10 years of 14.4. This suggests markets are reasonably priced and have potential for upside P/E expansion.

Lastly, you have heard the social networking pioneer Facebook plans to issue an Initial Public Offering (IPO) sometime very soon. While high-profile IPO’s may get a great deal of attention and headlines, they must always be evaluated like any other investment. One must consider all the pros & cons, earnings and valuation levels, and comparative alternatives. IPO’s, in particular, often have unique characteristics and circumstances that should be carefully considered.

Please contact our Wealth Advisors for any further assistance or questions.

Phil Mead, CFA® & Todd Feltz, CFP®, CFS®

(1) The Wall Street Journal – Market Data, Monday May 14, 2012, p C4
(2) Bureau of Labor Statistics – U.S. Department of Labor

P/E Ratio (price-to-earnings ratio) is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share. It is a financial ratio used for valuation; a higher P/E ratio means that investors are paying more for each unit of net income, so the stock is more expensive compared to one with a lower P/E ratio.

Sources: The Wall Street Journal –Market Data; U.S. Department of Labor– Bureau of Labor Statistics; FactSet Research Systems, FactSet.com

FELTZ WEALTHPLAN, a Registered Investment Advisor
Securities offered through LPL Financial, LLC, Member FINRA/SIPC

Indexes are unmanaged and cannot be invested into directly.
Past performance is no guarantee of future results.
Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

The Standard & Poor’s 500 Index is a capitalization weighted Index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by Individual and Institutional Investors.

Stock Investing involves risk including loss of principal.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which Investment(s) may be appropriate for you, consult your financial advisor prior to investing. Information is based on sources believed to be reliable, however, their accuracy or completeness cannot be guaranteed.

The Advanced 1st Quarter GDP report on Thursday showed a 2.2% growth rate versus the consensus estimate of 2.5%. (2) (Gross Domestic Product (GDP) is a measure of goods and services produced by an economy. It is the broadest measure of an economy and is reported quarterly as an annualized growth percentage.)

Additionally, an uptick in Initial Jobless Claims versus the estimates did not bode well for major improvements in Nonfarm Payrolls and the Unemployment Rate due out on Friday of this week. This is a big week for economic reports. In addition to the Labor Department reports on the employment picture, the Institute for Supply Management releases their reports on manufacturing and services activity for April. We also get Factory Orders from the Commerce Department.

Employment reports from the Labor Department will likely get the most attention. On Thursday comes Productivity and weekly Initial Claims, but on Friday will come the major reports for April on the Unemployment Rate and Nonfarm Payrolls. Expectations are quite modest as the consensus forecasts are for the Unemployment Rate to remain unchanged at 8.2% and for an addition of just 162,000 net-new jobs for April.(3)

Markets open this week of trading down slightly as more news from Europe, particularly Spain, has raised concerns again. However, as of this writing, trading volume was quite low and the U.S. markets seem to be taking it all in stride. Traders are more likely interested in the upcoming U.S. economic numbers.

After a strong start to 2012, April trading comes to a close today. April was a down and then an up market. The Dow and S&P 500 are very close to unchanged for the month. The second-half-of-the-month rebound can likely be attributed to generally better-than-expected earnings among U.S. corporations. It most likely played a major role last week as Apple Incorporated beat both earnings and revenue projections by over 20%.(4)

We now head into May. One famous Wall Street saying is “Sell in May and Go Away.” However, did you know that May has actually been the fifth best month of the year for the S&P 500 over the past 22 years? Since 1990, the S&P 500 has had an average total return of 1.46% during the month of May. (5)

Phil Mead, CFA® & Todd Feltz, CFP®, CFS®

(1) The Wall Street Journal – Market Data, Monday April 30, 2012, p C4
(2) Bureau of Economic Analysis – U.S. Department of Commerce
(3) Briefings.com
(4) YahooFinance.com – Analyst Estimates
(5) BTN Research

Sources: The Wall Street Journal –Market Data; U.S. Department of Commerce – Bureau of Economic Analysis; U.S. Department of Labor – Bureau of Labor Statistics; Institute for Supply Management; Briefings.com; YahooFinance.com; BTN Research

FELTZ WEALTHPLAN, a Registered Investment Advisor
Securities offered through LPL Financial, LLC, Member FINRA/SIPC

Indexes are unmanaged and cannot be invested into directly.
Past performance is no guarantee of future results.
Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

The Standard & Poor’s 500 Index is a capitalization weighted Index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by Individual and Institutional Investors.

The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on the NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index.

Stock Investing involves risk including loss of principal.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which Investment(s) may be appropriate for you, consult your financial advisor prior to investing. Information is based on sources believed to be reliable, however, their accuracy or completeness cannot be guaranteed.

Monday, April 23, 2012

After a couple of down weeks, the equity markets rebounded last week with the Dow Jones Industrial Average (Dow) up 1.40% and the S&P 500 up, a more modest, 0.60%. Although earnings expectations for the first quarter have been fairly conservative, there has generally been a “better-than-expected” trend in earnings reports thus far. This helped the market bounce back last week.

However, early this morning equity markets were sharply lower on renewed concerns regarding Europe. Concerns over the French elections and the possibility that the recent agreements among the European Union countries on debt issues could unravel have unsettled the markets. Additionally, a possible bribery scandal with Wal-Mart executives in Mexico was the talk of Wall Street all morning.

In a New York Times article on Saturday, Wal-Mart is alleged to have paid $24 million to Mexican officials to obtain building permits. The Times article also claimed the retailer had squelched an internal investigation. At this point, it is important to note that no charges have been filed and there is no current federal probe.

However, the United States has one of the world’s strictest laws regarding payments to foreign officials. The Foreign Corrupt Practices Act (FCPA) became law in 1977, and it makes it a federal crime for any company, officer, director, employee or agent of the company “to or even offer anything of value to any foreign official for purposes of influencing any act or decision of such foreign official in his/her official capacity, inducing such official to do or omit to do any act in violation of the lawful duty of such official or securing any improper advantage.” (1)

The Obama administration’s Justice Department has made enforcement of this act a priority and the Securities and Exchange Commission (SEC), which shares enforcement duties, set up a special FCPA unit in 2010. It would seem likely that the SEC and Justice Department will take a closer look at this and only time will tell how this will all work out.

While this story is bad publicity for Wal-Mart, it is probably not the main cause for the market pullback today. Political uncertainty in Europe is more likely what serious traders are concerned about today. The future for French President Sarkozy looks grim. He has been a major player along with German Chancellor Angela Merkel in finding a way forward with the European debt crisis but now will face Socialist candidate Hollande in a runoff election and is behind considerably in the polls.

While in the Netherlands, the Prime Minister and Cabinet resigned after failing to reach an agreement on reducing the country’s budget to meet European-austerity guidelines. This casts new doubts on upcoming Greek elections and the willingness of European governments to follow through on measures to improve their debt situations.

Back here in the U.S., the economy continues to plow along. After slogging through last year, and slowing down to just 1.2% annualized growth in the first three quarters of 2011, things have improved. In the fourth quarter last year, real GDP grew a solid, work-horse-like, 3 percent.(2) We expect that to continue in the first quarter of 2012. We get the Advanced GDP report for First Quarter 2012 on Thursday. (Gross Domestic Product (GDP) is a measure of goods and services produced by an economy. It is the broadest measure of an economy and is reported quarterly as an annualized growth percentage.)

If anything, other indicators suggest real GDP growth might be even stronger. Nonfarm payrolls rose 635,000 in Q1, the largest gain since 2006. Total hours worked in the private sector climbed at a 3.7% annual rate.(3) This is clearly not the recovery heaven of 1983-84, when real GDP grew at a 6.6% annual rate for two years and the jobless rate fell 3.5 percentage points in only 21 months.(4) It’s not a double dip, either, and after six consecutive months of 3% growth, the economy appears to be relatively healthy.

Lastly, it is baseball season and boys of summer have taken to the field but let’s hear a cheer for an old guy. Jamie Moyer of the Colorado Rockies became the oldest pitcher to earn a win in Major League Baseball. At 49 years, 150 days in age, Moyer broke a 79-½-year-old record last Tuesday when the Rockies beat the Padres 5-3. In his 25-year career, he has thrown 58,753 pitches. (Source: MLB)

Phil Mead, CFA® & Todd Feltz, CFP®, CFS®

(1) Foreign Corrupt Practices Act – U.S. Department of Justice
(2) Bureau of Economic Analysis – U.S. Department of Commerce
(3) Bureau of Labor Statistics – U.S. Department of Labor
(4) Economagic.com: Economic Time Series Data

Sources: The Wall Street Journal –Market Data; The New York Times; U.S. Department of Justice; U.S. Department of Commerce; U.S. Department of Labor: Economagic.com; Major League Baseball

FELTZ WEALTHPLAN, a Registered Investment Advisor
Securities offered through LPL Financial, LLC, Member FINRA/SIPC

The Standard & Poor’s 500 Index is a capitalization weighted Index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by Individual and Institutional Investors.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which Investment(s) may be appropriate for you, consult your financial advisor prior to investing. Information is based on sources believed to be reliable, however, their accuracy or completeness cannot be guaranteed.

Monday, April 16, 2012

Well, it is that time of year again. That being the deadline for income tax filings. This year thanks to a quirk in the calendar, April 15th fell on a Sunday. As a result, the deadline for filing your 2011 tax return is actually tomorrow April 17th. While it is usually not a day of celebration, it does usually supply all kinds of trivia facts. For example, one local radio station stated this morning that the IRS tax code is forty times longer than the complete works of William Shakespeare. This was tough to source. The closest I could come was from politicalcalculations.com that has the IRS tax code at 72,536 pages and my copy of The Complete Shakespeare, Pelican Press (Yes, I have one.) at 1,232 pages, which by my calculations is a lot more than forty times. Also from U.S. News, 3.8-million skilled workers toil full-time on tax reporting which makes the tax-compliance industry six times larger than car making.

No matter how large a trivia buff you are most of these “fun facts” are not so fun. In fact, they tend to be very sobering. According to the U.S. Department of Treasury, the Federal Government is expecting approximately $1.4 trillion in tax revenue from income taxes. However, the expected deficit spending for 2012 is estimated to be $1.33 trillion.(1) Now, I cannot tell you what the budget numbers are because the U.S. Federal Government has operated without a fiscal budget for over 1,000 days. (Tuesday, Jan. 24, 2012, marked one-thousand days since the last passed budget on April 29, 2009.)(2)

Down the line, the tax situation for 2013 earnings and investment income only gets more convoluted. The Bush-era income-tax rate reductions, which were extended after the mid-term elections of 2010, will expire at the end of 2012. The top-two income brackets will see an increase from 33% to 36% and 35% to 39.6%. Dividends, Interest and Capital Gains rates are also slated to increase. Currently Interest, Dividends and long-term Capital Gains are taxed at the same 15% level. However, for 2013, long-term Capital Gains taxes are slated to rise to 20% and Dividends & Interest Income to ordinary income rates (for example: 36% & 39.6% for the top-two income brackets).(3)

Additionally, part of the Affordable Care Act (a.k.a. Obamacare) a 3.8% additional tax may be levied on those with Adjusted Gross Income greater than $250,000 for all non-qualified payments including income, capital gains, dividends, & interest income.(4)

The financial press has coined the term “Taxmageddon” as like Armageddon to describe the coming fury of taxes. As with anything dealing with congress, there is still opportunity to change, adjust or repeal any of these tax laws. We may see a great deal of activity in Washington during the lame-duck session or early in 2013.

We, on the other hand, are not waiting on congress. We have already begun to discuss and plan for these possibilities. We are looking closely at changes to our investment management in order to better address these issues.

The tax issue will likely be front and center over the coming months as the election heats up. It is an issue we will be watching very closely and are preparing to act accordingly. We will continue to keep up to date as the year progresses and into 2013.

Phil Mead, CFA® & Todd Feltz, CFP®, CFS®

(1) Congressional Budget Office (CBO), 2012 Revenue and Spending Projections
(2) Heritage Foundation, “1,000 Days Without A Budget” by Mike Brownfield, Jan. 20, 2012, www.heritage.org
(3) Sun Life Financial “Tax increases for 2013” by James Slotnick, JD
(4) Sun Life Financial “Tax increases for 2013” by James Slotnick, JD

Sources: U.S. Department of Treasury, Congressional Budget Office, Heritage Foundation, Sun Life Financial, Investopedia.com

FELTZ WEALTHPLAN, a Registered Investment Advisor
Securities offered through LPL Financial, LLC, Member FINRA/SIPC.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which Investment(s) may be appropriate for you, consult your financial advisor prior to investing. Information is based on sources believed to be reliable, however, their accuracy or completeness cannot be guaranteed.

Monday, April 9, 2012

After a strong start to 2012, the first trading week of the Second Quarter had a pullback. It was a shortened four-day week with the markets closed on Friday. The Dow Jones Industrial Average and the S&P 500 indexes ended down for the week, -1.15% and -0.74% respectively.(1) Comments from Federal Reserve officials cast doubts on any additional monetary stimulus coming from the Fed. Some traders had priced in another round of stimulus and thus sold on the Fed officials’ comments. Stock indexes opened Monday sharply lower as the market got its first chance to trade on jobs numbers for March, which were released Friday.

Unfortunately, the March results were considerably weaker than expected. Only 120,000 net new jobs were reported in the Nonfarm Payroll report from the Labor Department on Friday. The consensus forecast had been for 200,000 net new jobs. The Unemployment Rate did tick down one-tenth of one percent to 8.2 percent. However, that was mainly credited to people abandoning their job searches and leaving the job market. Weekly Initial Claims for unemployment insurance dropped slightly from the prior week but were a little higher than expectations. As of this writing, the major indexes had rebounded somewhat off the earlier lows.

Eyes will again turn toward the Federal Reserve this week as its Beige Book is released on Wednesday. Formally called the Summary of Commentary on Current Economic Conditions, it is a report published by the United States Federal Reserve Board eight times a year. The report is published in advance of meetings of the Federal Open Market Committee. Each report is a gathering of anecdotal information on current economic conditions by each Federal Reserve Bank in its district from Bank and Branch directors and interviews with key business contacts, economists, market experts, and others. Market watchers use the report to get a read on what direction Fed policy may take. The report’s nickname Beige Book comes from the beige-colored paper the report has been traditionally printed on.

Additionally, we will get our first look at First Quarter 2012 earnings this week. Alcoa, which traditionally leads off big-board companies, reports its quarterly numbers on Tuesday. We will also get reports from Wells Fargo and J.P. Morgan Chase, which should give some insight into the financials. Google’s numbers, after the close on Thursday, will be highly anticipated. While only a handful of key companies report this week, it should give us an early indication of how earnings will trend.

Expectations have already been lowered as the general consensus among analysts seems to be earnings will decline slightly from the prior quarter and from year-over-year. If this happens, it would break a streak of nine straight quarters of earnings growth since 2009.(2)

While the markets seem to generally be prepared for softer earnings, a few key upside surprises could spark a rebound off this recent pullback. The Dow Jones Industrial Average is still up 6.90% for 2012 year to date including last week’s 1.15% pullback, while the S&P 500 is up 11.83% and the NASDAQ Composite is up 18.24% year to date.(3)

While we shall be monitoring earnings results very closely over the next several weeks, market impact may generally be priced in already and these short-term developments are unlikely to affect our overall cautiously optimistic outlook for the economy and markets.

Phil Mead, CFA® & Todd Feltz, CFP®, CFS®

(1) The Wall Street Journal – Market Data – Monday, April 9, 2012, p. C4
(2) Associated Press, “Stocks slide in reaction to hiring slump in March” April 9, 2012
(3) The Wall Street Journal – Market Data – Monday, April 9, 2012, p. C4

Sources: U.S. Department of Labor – Bureau of Labor Statistics; the Federal Reserve; The Wall Street Journal

FELTZ WEALTHPLAN, a Registered Investment Advisor
Securities offered through LPL Financial, LLC, Member FINRA/SIPC

Indexes are unmanaged and cannot be invested into directly.
Past performance is no guarantee of future results.
Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

The Standard & Poor’s 500 Index is a capitalization weighted Index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by Individual and Institutional Investors.

The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on the NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index.

Stock Investing involves risk including loss of principal.

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which Investment(s) may be appropriate for you, consult your financial advisor prior to investing. Information is based on sources believed to be reliable, however, their accuracy or completeness cannot be guaranteed.

Monday, April 2, 2012

Trading for first quarter of 2012 concluded on Friday, and it was quite a quarter. The blue chip, Dow Jones Industrial Average (Dow), index posted its largest first-quarter point gain ever of 994 points.(1) This amounted to an 8.1% gain for the Dow, a year-to-date return that represents the best first-quarter performance in 14 years for the index. The S&P 500 and NASDAQ Composite had an even more impressive first-quarter performance of 12.0% and 18.7% respectively.(2)

The strong performances of U.S. equity indexes were part of a wider rally in equities globally. Markets across the Americas, Asia and even Europe posted strong gains. As the European debt crisis has eased, major European markets (with the exception of Spain) rebounded in the first quarter. Germany’s DAX index leads the pack with a 17.8% year-to-date return.

Four years out from the historic financial-market crisis of 2008, a sense of normalcy has begun to return to the financial markets. However, a great deal of money that exited the markets has essentially yet to return and a high level of skepticism remains among many market watchers.

Despite the Dow posting six straight months of gains and standing only about 7% below its record high it hit in October of 2007, U.S. investors have pulled over $15 billion from equity mutual funds thus far this year according to the Investment Company Institute. Trading volume also has not been very strong. The New York Stock Exchange reports that first-quarter trading volume was 15% below first quarter last year and was at its lowest quarterly level since 2007.

Among the skeptics, they point to similar starts in 2010 and 2011 before market plunges later in the year. Debt concerns still hang over the U.S. and especially Europe. Many of these concerns still lack long-term solutions. On top of this are new concerns over fuel costs and possible supply disruptions for oil.

Attention will shift to corporate earnings’ reports during the next couple of weeks. At this juncture, expectations seem to be for modest increases. Additionally, the March jobs’ report will be released this Friday. The results in these two areas will likely drive the direction of equities as we enter the second quarter.

In our opinion, overall equity-index valuations are within reasonable levels, and we remain cautiously optimistic. We shall be monitoring earnings results very closely and continue to evaluate the risks to the global markets.

Phil Mead, CFA® & Todd Feltz, CFP®, CFS®

(1) The Wall Street Journal, “Dow Starts the Year With a Spring” Saturday/Sunday, March 31-April 1, 2012
(2) The Wall Street Journal – Market Data – Saturday/Sunday, March 31-April 1, 2012, p. B6

Sources: The Wall Street Journal; Dow Jones & Company; Standard & Poor’s; Nasdaq; Investment Company Institute; New York Stock Exchange

FELTZ WEALTHPLAN, a Registered Investment Advisor
Securities offered through LPL Financial, LLC, Member FINRA/SIPC

Indexes are unmanaged and cannot be invested into directly.
Past performance is no guarantee of future results.
Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

The Standard & Poor’s 500 Index is a capitalization weighted Index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by Individual and Institutional Investors.

The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on the NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index.

DAX is a blue chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange.

Stock Investing involves risk including loss of principal.

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which Investment(s) may be appropriate for you, consult your financial advisor prior to investing. Information is based on sources believed to be reliable, however, their accuracy or completeness cannot be guaranteed.

Monday, March 26, 2012

Although it was the worst week of 2012, last week only saw a slight pullback. The Dow Jones Industrial Average (Dow) dropped slightly over 1.1 percent, while the S&P 500 was off just one-half of one percent. Rising gasoline and some weaker-than-expected economic numbers out of China were cited as reasons. However, the Dow and S&P 500 are rallying up nearly one percent this morning as Federal Reserve Chairman, Ben Bernanke, again signaled the Fed is inclined to keep the Fed Funds rate at the current low level. In a speech to the National Association for Business Economics, the Fed Chairman questioned the recent pace of labor-market improvements. He stated:

“There are a lot of things happening in the labor market we don’t fully understand,” and while the labor market may lead to a self-sustaining recovery, “we have not seen that in a persuasive way yet,” Bernanke added. “And I think it remains important for us to remain cautious and see how the economy develops.”

This basically translates into the fact the Federal Reserve is likely to keep rates down at current levels for a considerable time to help foster a faster pace of economic growth. As the Fed Funds rate is essentially the base rate from which all other interest rates are derived from, we think we are likely to continue to have low yields on fixed-income investments.

While this makes it a considerable challenge for many fixed-income instruments to achieve any real return over inflation, this may bode well for equity investments. The article “Pendulum Is Seen In Swing to Stocks” in The Wall Street Journal today speaks directly about a “swing to stocks.”

We don’t expect a drastic fall in bonds or a mad dash into stocks; however, investor sentiment towards stocks may slowly be turning as the European crisis fades and the economy continues to grow. A less attractive fixed-income market also helps point investors back to stocks. A large portion of the money that was pulled out of equity investments back during the crisis of 2008 has yet to return to the market.*

This implies a level of demand that could come back into the market. Coupling this with the relatively attractive valuation levels and earnings levels supports our cautiously optimistic outlook for U.S. equities.

Phil Mead, CFA® & Todd Feltz, CFP®, CFS®

Sources: The Wall Street Journal; MarketWatch.com, National Association for Business Economics; Dow Jones & Company; Standard & Poor’s; CNBC Investment Company Institute*

FELTZ WEALTHPLAN, a Registered Investment Advisor
Securities offered through LPL Financial, LLC, Member FINRA/SIPC

Indexes are unmanaged and cannot be invested into directly.
Past performance is no guarantee of future results.
Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

The Standard & Poor’s 500 Index is a capitalization weighted Index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by Individual and Institutional Investors.

Stock Investing involves risk including loss of principal.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which Investment(s) may be appropriate for you, consult your financial advisor prior to investing. Information is based on sources believed to be reliable, however, their accuracy or completeness cannot be guaranteed.

While there was plenty of excitement on the courts, the financial markets had a little excitement of their own. The major indexes moved above some key psychological levels. The equity markets moved up strongly last Tuesday and held the gains to push both the Dow Jones Industrial Average and the S&P 500 up over 2.4 percent for the week.

The Dow Jones Industrial Average (Dow) rallied last Tuesday well above the 13,000 mark and closed above it for the first time since February 28th. It now stands less than 800 points from its all-time high set back in October of 2007. Not to be outdone, the S&P 500 also topped a key psychological level of 1400. It is around 10% off its all-time high.

The equity markets continue to be on this “grind higher” as slow but steady improvements in the employment picture and other economic numbers continue to be reported. The Dow and S&P 500 are up over 8% and 11%, respectively, year to date, and this has been achieved without any significant pullbacks. With that said, we are two weeks from the end of the quarter which will soon shift attention to corporate earnings reports.

A few key earnings disappointments could prompt some short-term profit taking and pull the indexes back. It could easily be somewhat of a mixed reporting season as year-over-year numbers may be difficult for many firms to show large increases due to that first quarter last year was also relatively strong. However, the consensus at this point is for relatively modest growth and continued expansion in both manufacturing and services. One wild card will be the overall impact of rising fuel costs on corporate America’s bottom-line. It is already becoming a concern from the consumer-spending angle.

In summation, little has changed to alter our generally cautious optimistic outlook for the economy and equity markets. We will diligently study the continued impact of fuel prices and how the upcoming earnings season alters market valuation levels.

Please feel free to contact your Wealth Advisor with questions or concerns and enjoy the basketball.

Phil Mead, CFA® & Todd Feltz, CFP®, CFS®

Sources: The Wall Street Journal; Dow Jones & Company; Standard & Poor’s

FELTZ WEALTHPLAN, a Registered Investment Advisor
Securities offered through LPL Financial, LLC, Member FINRA/SIPC

Indexes are unmanaged and cannot be invested into directly.
Past performance is no guarantee of future results.

The Standard & Poor’s 500 Index is a capitalization weighted Index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by Individual and Institutional Investors.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which Investment(s) may be appropriate for you, consult your financial advisor prior to investing. Information is based on sources believed to be reliable, however, their accuracy or completeness cannot be guaranteed.