|Total Returns %||1 Week||1 Month||3 Month||1 Yr Avg||3 Yr Avg||5 Yr Avg||YTD|
|MSCI All Country World||
Source: Morningstar, Inc. Data through 11-5-10
This last week was “as advertised.” In addition to the Republicans regaining control of the House of Representatives, the Fed announced it will buy another $600 billion in treasuries over the next eight months to keep rates low and stimulate the economy. While the market reacted like a firework dud on Wednesday after the election results and Fed announcement, it took off like an M-80 on Thursday after investors digested all the information. The major equity indexes moved higher during the week to levels not seen in two years since the Lehman Brothers disaster. Commodities then followed as oil hit a six-month high.
Overseas, Asian and European leaders sharply criticized the Fed’s quantitative easing; stay tuned for drama from this week’s G20 meeting of the world’s leading economies. The European Central Bank has refused to partake in new stimuli. The Bank of England did not follow the US with a stimulus plan, but they did leave the door open for additional bond buying should the British economy weaken in the months to come.
Both the ISM manufacturing index and September factory orders data showed continued strength. The services version of ISM grew for the 10th straight month also. Additionally, manufacturing rose in both China and India. While the domestic jobless rate continues to be too high at 9.6%, the nonfarm report was actually positive. A better-than-expected 151,000 new nonfarm jobs were added to the economy in October, and the private sector additions were also revised upward in both September and August.
This coming week pales in comparison to the week we just encountered in terms of economic news. Only two reports – trade and jobless claims – will be released. Continuing the earnings season, Macy, Kohl’s, and JC Penney will report.
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.