Total Returns % 1 Week 1 Month 3 Month 1 Yr Avg 3 Yr Avg 5 Yr Avg YTD
Dow Jones 1.46 2.22 2.37 11.41 -4.77 2.29 3.79
NASDAQ 1.60 6.54 0.54 8.88 -4.36 0.61 2.34
S&P 500 1.50 3.22 1.38 7.80 -6.55 0.21 2.42
Russell 2000 2.39 4.13 -1.85 7.21 -4.28 0.72 5.06
MSCI All Country World 1.60 3.45 4.60 2.61 -8.55 -0.05 -0.32

Source: Morningstar, Inc.  Data through 09-17-10 

In the US, equities were up for the week as tech reports were favorable.  Retail sales increased for the 2nd straight month in August; back-to-school sales (and sales tax-free shopping days) didn’t appear to be as weak as some analysts feared. Industrial production climbed for the 12th month out of the last 14.  However, the pace has slowed as manufacturers are attempting to match consumer demand without overproducing.  An increase in the Producer Price Index (PPI) for the 2nd straight month helped calm some growing deflation fears; on the other hand, inflation appears to remain under control for the time being as well.  Jobless claims dropped to their lowest level in two months, and the four-week moving average also declined.  On the negative side, the consumer confidence index dropped to its worst level since August 2009; this was most likely caused by growing concerns that personal income tax levels will increase next year.

Across the globe, China continues to experience strong economic growth; they reported a better-than-expected increase in industrial production.  Australia reported that its economy is running at near to full capacity.  Japan started selling its own currency to bring its value down.  This move was made to stop the rising yen and help its struggling economy; Switzerland also weakened its currency.  A country weakening its currency is one of the best ways for a country to give exports a boost, so this was a substantial move.  Japan and Switzerland are both very large exporters, and a rising currency makes their exports more expensive to others.

One of the byproducts of countries weakening their currency is a rise in gold prices; you may have noticed that gold was up considerably last week.  The logical place to look for an investment when it seems all the countries are trying to devalue their currency is gold and other precious metals (i.e., silver).  This current landscape is why I have a small portion of my clients’ portfolios invested in gold.

The upcoming week will see data released for new construction and home sales.  This will be analyzed closely as the data will show how the housing sector faired once the government’s tax rebate/home buying program ended.  As the summer is coming to a close, market volume should increase; this will hopefully decrease the daily volatility that we saw over the summer months.

Would you like an analysis of your current investment portfolio?  Call me to schedule your free consultation- 913.693.7918.

John P. Chladek, MBA, CFP® is the President of Chladek Wealth Management, LLC, a fee-only financial planning and investment management firm specializing in helping families and couples who are not yet retired realize their financial goals.  For more information, visit https://www.chladekwealth.com.

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