WILL THE MORTGAGE ACCORD BRING MUCH RELIEF?
While the $25+ billion settlement reached last week between five large mortgage servicers and 49 states was momentous, it may not help many borrowers in trouble. Only about 1 million of the estimated 11 million underwater homeowners will see relief as loans sold to Fannie Mae and Freddie Mac aren’t included in the deal. Much of the settlement money will go toward mortgage modification. Roughly 750,000 homeowners are slated to receive financial compensation from the accord (an average of about $2,000 per household). The lenders involved are JPMorgan Chase, Bank of America, Ally Financial, Citigroup and Wells Fargo; other banks could join them. (The state of Oklahoma forged its own agreement with the five lenders.)1,2

CONSUMER CONFIDENCE TAKES A DIP
The University of Michigan’s initial February consumer sentiment survey fell to 72.5 from its one-year peak of 75.0 at the end of January. Economists polled by Bloomberg News had expected a 74.8 reading. However, the percentage of consumers who felt the jobless rate would fall in future months was at the highest level the survey had seen in 28 years.3

GOLD SLIPS, OIL GAINS
Gold futures pulled back $14.60 last week, settling at $1,723.30 on the COMEX Friday; that left gold up 10.06% YTD. Oil is still hovering around $100: NYMEX crude finished Friday at $98.67, advancing 0.85% for the week.4

STOCKS RETREAT FOR THE WEEK ON FRIDAY LOSSES
When the Dow’s worst day of 2012 brings only an 89-point loss, it seems the year is off to a good start. That loss occurred Friday after another stall in the Greek debt negotiations. On the week, the major U.S. indices pulled back a bit: DJIA, -0.47% to 12,801.23; S&P 500, -0.17% to 1,342.64; NASDAQ, -0.06% to 2,903.88.5,6

THIS WEEK: Monday, President Obama submits his 2013 fiscal budget proposal to Congress. Tuesday, the Census Bureau publishes January retail sales figures and MetLife issues Q4 earnings. Wednesday, the Fed issues the 1/25 FOMC minutes, the federal government comes out with figures on January industrial output and Q4 results arrive fromComcast, Deere, CBS, Abercrombie & Fitch and Nvidia. On Thursday, General Motors, Nordstrom and Baidu come out with earnings and new initial jobless claims are announced; January’s PPI is also released plus data on January housing starts, and Fed chairman Ben Bernanke speaks at an FDIC hearing. Friday, January’s CPI comes out along with the Conference Board’s newest leading economic indicator index; Q4 results come in from Heinz and Campbell’s Soup.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+4.78

+4.68

+0.35

+2.95

NASDAQ

+11.47

+4.06

+3.61

+5.73

S&P 500

+6.76

+1.57

-1.33

+2.07

REAL YIELD

2/10 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

-0.24%

1.39%

2.43%

3.48%

 
Sources: online.wsj.com, bigcharts.com, treasury.gov, treasurydirect.gov – 2/10/126,7,8,9
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.

Jeffrey Foster is a Registered Representative with, and securities are offered through LPL Financial, Member FINRA/SIPC.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 – abcnews.go.com/Business/feds-announce-25b-foreclosure-deal/story?id=15545458#.TzWEzOSX1c4 [2/9/12]
2 – www.thefiscaltimes.com/Articles/2012/02/10/What-the-$26-Billion-Bank-Deal-Means-to-You.aspx#page1 [2/10/12]
3 – www.businessweek.com/news/2012-02-10/consumer-sentiment-in-u-s-falls-more-than-forecast-economy.html [2/10/12]
4 – blogs.wsj.com/marketbeat/2012/02/10/data-points-energy-metals-546/ [2/10/12]
5 – montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [2/10/12]
6 – blogs.wsj.com/marketbeat/2012/02/10/data-points-u-s-markets-79/ [2/10/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F10%2F11&x=0&y=0 [2/10/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F10%2F11&x=0&y=0 [2/10/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F10%2F11&x=0&y=0 [2/10/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F9%2F07&x=0&y=0 [2/10/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F9%2F07&x=0&y=0 [2/10/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F9%2F07&x=0&y=0 [2/10/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F11%2F02&x=0&y=0 [2/10/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F11%2F02&x=0&y=0 [2/10/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F11%2F02&x=0&y=0 [2/10/12]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [2/10/12]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [2/10/12]
9 – treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm10902.pdf [1/9/02]