December 30, 2011



May 6, 2016

 

Dear Investors,

The markets continue to slowly move lower since the April 20th peak. Each wave has set a lower low and a lower high. The trading pattern over the last two weeks looks similar to the November high point when the markets slowly moved lower and then accelerated down in January. There is a Fibonacci phi mate turning date estimated for May 12th, which could be the peak of a bounce higher which may be lower than the previous high since the markets generated another technical sell sign this week.

The markets finished lower for the second consecutive week. The S&P 500 Index lost 8.16 points, or -0.4%, to close the week at 2,057.14, and is up 0.7% this year. The Dow Jones Industrial Average slipped 33.01 points, or -0.2%, this week to close at 17,740.63, and is up 1.8% this year. The NASDAQ Composite lost 39.23 points, or -0.8%, this week to close at 4,736.15, and is down 5.4% this year. The Russell 2000 was the largest percentage loser of the week as it declined 1.4%, or 16.12 points, to close at 1,114.72, and is down 2.0% this year.

The markets rallied on Friday after a lower-than-expected April Jobs Report from the Department of Labor said that only 160,000 jobs were created last month. Investors believe that the disappointing jobs data will delay the Federal Reserve from raising interest rates. Earlier in the week, we learned that construction spending was lower than expected. On the bright side, factory orders were higher than expected following last month’s lower than expected numbers. As further proof that the jobs data is misleading, consumer credit jumped higher in March than expected. If all of these “so-called” jobs have been created without an increase in personal spending, then why would consumer credit double this month to $29.6 billion. The reality is that the jobs report assumed that 223,000 new jobs were added from new businesses that may have started last month. Without that assumption, the economy lost 73,000 jobs last month which is more in line with doubling consumer debt.

In late December when experts were expecting the Federal Reserve to raise interest rates 2-4 times this year, I said that I did not believe that the Fed would raise interest rates this year. I do not think that there will be another interest rate hike this year. In fact, the closer we get to the Presidential election, the less likely a rate hike is. Although this may move the market higher in the short term, such as this Friday, there is mounting support for a larger, steeper decline.

The downside risk of the markets is much greater than the upside potential. This may be a great time to take some profits or rebalance or reallocate your portfolio. If you want to discuss your financial plan, risk analysis, and/or tax strategies or would like to refer a friend or family member, then please call our office or email info@. It is time to put our B.E.L.I.E.V.E. Wealth Management process to work for you.

Regards,

Vincent Pallitto, CPA, CFP®   

Certified College Planning Specialist

Summit Asset Management, Inc.



973-301-2360

973-301-2370 Fax

A branch office of, and securities offered through LPL Financial

Member FINRA SIPC

 

You cannot invest directly in a market index, market indices are for benchmark purposes.  The information in this market commentary is obtained from various news sources, and . 

Fibonacci Phi Date (also known as Fibonacci Time Extensions) is a technical indicator used to seek to identify the timing of significant price movement in the market, and is based on the Fibonacci Number Sequence.

The Hindenburg Omen is a combination of technical factors that attempt to measure the health of the NYSE, and by extension, the stock market as a whole.  The goal of the indicator is to signal increased probability of a stock market crash.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.  To determine which investment(s) may be appropriate for you consult your financial advisor prior to investing.

The economic forecasts set forth in the presentation may not develop as predicted and there can be no guarantee that strategies promoted will be successful. All performance referenced is historical and is no guarantee of future results.

The Standard & Poor’s 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by individuals and institutional investors.

The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market.

The Russell 2000 Index is an unmanaged index generally representative of the 2,000 smallest companies in the Russell 3000 index, which represents approximately 10% of the total market capitalization of the Russell 3000 Index.

The Blue Chip Index is a stock index that tracks the shares of the top-performing publicly traded companies.  These indices are unmanaged, which cannot be invested into directly.

Past performance is no guarantee of future result.

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