NEW YEAR, NEW LAWS AFFECTING YOU
Singles earning more than $200,000 and couples earning more than $250,000 will face a 3.8% Medicare surtax and a 0.9% increase in Medicare payroll tax. Tax rates on dividends and long-term capital gains remain at 15% for most, but have risen to 20% for the wealthiest. A scheduled 2% cut to Medicare spending has been delayed until at least March. Social Security recipients will see benefits rise 1.7% this year.1,2,3

HUGE CHANGES AHEAD FOR HOME LOANS
Last week, the Consumer Financial Protection Bureau presented new rules for the mortgage industry – rules that will ban teaser-rate mortgages and “liar loans” in 2014. Next year, no legal protection will be available for banks offering interest-only or negative-amortization loans, and restrictions will prevent lenders from originating mortgages with balloon payments and severe upfront points and fees. Banks will also be barred from offering mortgages with a payment-to-income ratio exceeding 43%, though FHA/VA loans or mortgages backed by Fannie Mae or Freddie Mac could be exempt from this restriction.4

JACK LEW NOMINATED FOR TREASURY SECRETARY
The former hedge fund manager and current White House chief of staff has strong ties to Wall Street, which worries some members of Congress. Still, opposition to the nomination does not seem to be widespread. If confirmed, Lew could start his new job in late January, when Timothy Geithner is slated to leave the post.5

A SECOND STRAIGHT WINNING WEEK
The S&P 500 settled at 1,472.05 Friday, up 0.38% in five trading days. The Dow rose 0.40% last week to 13,488.43, while the NASDAQ gained 0.77% to settle at 3,125.63. The CBOE VIX fell 3.33% on the week to go -25.80% YTD.6,7

THIS WEEK: Fed Chairman Ben Bernanke speaks at the University of Michigan Monday; the Detroit Auto Show also begins. Tuesday, the December PPI and December retail sales figures are out; Lennar offers Q4 results. Wednesday brings December’s CPI, a Fed Beige Book, a report on December industrial output and earnings from Goldman Sachs, eBay, JPMorgan and Bank of NY Mellon. Thursday, December housing starts data arrives plus earnings from Bank of America, BB&T, BlackRock, Capital One, Citigroup, UnitedHealth, American Express and Intel. Friday, earnings are in from Morgan Stanley and General Electric.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+2.93

+8.35

+1.40

+5.35

NASDAQ

+3.51

+15.30

+5.62

+11.59

S&P 500

+3.22

+13.89

+1.01

+5.87

REAL YIELD

1/11 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

-0.63%

-0.10%

1.56%

2.34%

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 1/11/126,8,9,10
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment Advice offered through TVAMP, a registered investment advisor. Foster Investment and Retirement Services and TVAMP are separate entities from LPL Financial.

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 – money.msn.com/tax-tips/post.aspx?post=0788a6e0-58d0-4a46-81d2-309089bbc1ac [1/11/13]
2 – www.fidelity.com/viewpoints/personal-finance/new-medicare-taxes [1/4/13]
3 – www.ssa.gov/pressoffice/pr/2013cola-pr.html [10/16/12]
4 – www.nytimes.com/2013/01/10/business/consumers-win-some-mortgage-safety-in-new-rules.html [1/10/13]
5 – www.cbsnews.com/8301-250_162-57563329/jack-lew-accepts-treasury-secretary-nomination/ [1/10/13]
6 – www.cnbc.com/id/100372685 [1/11/13]
7 – montoyaregistry.com/Financial-Market.aspx?financial-market=retirement-investment-funds&category=3 [1/11/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F11%2F12&x=0&y=0 [1/11/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F11%2F12&x=0&y=0 [1/11/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F11%2F12&x=0&y=0 [1/11/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F11%2F08&x=0&y=0 [1/11/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F11%2F08&x=0&y=0 [1/11/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F11%2F08&x=0&y=0 [1/11/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F10%2F03&x=0&y=0 [1/11/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F10%2F03&x=0&y=0 [1/11/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F10%2F03&x=0&y=0 [1/11/13]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [1/11/13]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [1/11/13]
10 – treasurydirect.gov/instit/annceresult/press/preanre/2003/ofm010803.pdf [1/8/03]