IS A FIX COMING FOR EUROPE’S DEBT CRISIS?
Last week, global markets rallied on European Central Bank President Mario Draghi’s assertion that risks to the EU economy had increased, interpreting it as a signal that the ECB and other central banks might take swift action to rescue weaker eurozone nations. (Stateside, Federal Reserve Chairman Ben Bernanke offered no signal of more easing, but San Francisco Fed President Janet Yellen hinted that it might be possible.) Friday, President Obama urged EU leaders to address the sovereign debt crisis decisively, a request that gave stocks a boost Friday, even as Reuters reported that Spain was going to ask for an EU/IMF bailout. Will the EU and IMF decide to create something like TARP, or enlarge their bailout fund? The world is watching, and Greece’s special elections are coming up.1,2,3

SERVICE SECTOR GROWS SLIGHTLY FASTER
Many analysts had predicted a May decline in the Institute for Supply Management’s closely watched non-manufacturing index. That didn’t happen: the primary index rose 0.2 points in May to 53.7, and the new orders index rose 2.0 points to 55.5.4 

LATEST BEIGE BOOK REASSURES ANALYSTS
The Fed’s latest periodic roundup of economic conditions in its 12 districts had 10 of them reporting either “moderate” or “modest” growth. Some economists had feared it might chronicle lost momentum; instead, it noted improving conditions in manufacturing, consumer spending and the housing market.5

GREAT GAINS ON WALL STREET
New hope of central bank action spurred the following weekly advances: S&P 500, +3.73% to 1,325.66; DJIA, +3.59% to 12,554.20; NASDAQ, +4.04% to 2,858.42. Gold lost 1.89% last week with futures settling Friday at $1,591.40. Oil rebounded with a 1.05% gain for the week, settling Friday at $84.10 on the NYMEX.3       

THIS WEEK: Monday, markets may react to the anticipated weekend request by Spain for bank recapitalization; also, Apple’s Worldwide Developer Conference begins with the promise of new product introductions. Nothing major is scheduled for Tuesday. Wednesday, the Commerce Department releases the May Producer Price Index and May retail sales data; JPMorgan’s Jamie Dimon testifies before the Senate. Thursday offers the May Consumer Price Index and earnings from Smithfield Foods, Kroger and Pier 1. Friday is a quadruple witching day that also marks the release of the University of Michigan’s preliminary June consumer sentiment survey along with data on May industrial production.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+2.76

+4.19

-1.30

+3.09

NASDAQ

+9.72

+6.84

+2.21

+8.62

S&P 500

+5.41

+3.60

-2.41

+2.90

REAL YIELD

6/8 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

-0.50%

0.76%

2.69%

3.48%

Sources: money.msn.com, bigcharts.com, treasury.gov, treasurydirect.gov – 6/8/123,7,8,9
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 – www.reuters.com/article/2012/06/06/markets-global-idINL1E8H6FCI20120606 [6/7/12]
2 – www.cnbc.com/id/47720735/ [6/7/12]
3 – money.msn.com/market-news/post.aspx?post=c3e3a1ff-6754-4802-a4c2-41f8bba675f0 [6/8/12]
4 – www.ism.ws/ISMReport/NonMfgROB.cfm [6/5/12]
5 – articles.marketwatch.com/2012-06-06/economy/32069969_1_economic-reports-beige-book-moderate-growth [6/6/12]
6 – montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [6/8/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F8%2F11&x=0&y=0 [6/8/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F8%2F11&x=0&y=0 [6/8/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F8%2F11&x=0&y=0 [6/8/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F8%2F07&x=0&y=0 [6/8/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F8%2F07&x=0&y=0 [6/8/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F8%2F07&x=0&y=0 [6/8/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F7%2F02&x=0&y=0 [6/8/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F7%2F02&x=0&y=0 [6/8/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F7%2F02&x=0&y=0 [6/8/12]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/8/12]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/8/12]
9 – treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm10902.pdf [1/9/02]