Weekly Economic Update, August 9, 2010

UNEMPLOYMENT REMAINS AT 9.5%
The American economy added 71,000 jobs in July but lost 202,000 others (143,000 of those positions were short-term Census Bureau hires). The private sector added 630,000 jobs during the first seven months of 2010; that 90,000 per month is far short of the 150,000 per month that would be commensurate with population growth. The bright spot: economists had presumed the jobless rate would edge up to 9.6% in July.¹

ISM: MANUFACTURING & SERVICE SECTOR GROWING
The Institute for Supply Management’s service sector index rose to 54.3 for July, a nice surprise (economists polled by Bloomberg had forecast a dip to 53.0). The new orders and employment components of the service sector index both showed growth. ISM’s manufacturing index came in at 55.5 for July, beating a Briefing.com consensus forecast of 54.2. (However, the Commerce Department noted that factory orders declined by 1.2% in July following a 1.0% fall in June.)^2.3,4

SAVING OUTPACES SPENDING
Personal spending and personal incomes were both flat last month according to the Commerce Department. The personal savings rate increased again to 6.4% – it has risen monthly since February, and it hasn’t been under 5.0% since October 2008. (During 2007, the personal savings rate averaged just 2.1%.) The good news is that households are accumulating cash reserves; the bad news is that the primary engine of the economy is subdued.⁵

FEWER HOMEBUYING CONTRACTS SIGNED IN JUNE
Pending home sales decreased by 2.6% in June, according to the National Association of Realtors; the number was 19.0% below year-ago levels. The June dip may reflect buyers rushing to sign contracts before federal incentives could expire.⁶

15-YEAR FRMs BELOW 4.0%; 30-YEAR FRMs BELOW 4.5%
Freddie Mac reported the average rate on a 30-year home loan at 4.49% last week; a year ago, the national average was 5.22%. Rates on 15-year FRMs were 3.95% last week, compared to 4.63% at this time in 2009.⁷

STOCKS GAIN FOR SECOND STRAIGHT WEEK
The DJIA rose 1.79% last week, the NASDAQ advanced 1.50%, and the S&P 500 gained 1.82%. At Friday’s closing bell, the S&P 500 was at 1,121.64, the NASDAQ at 2,288.47, and the Dow at 10,653.56.⁸

This material was prepared by Peter Montoya Inc., and does not necessarily represent the views of Statler Financial Services, Inc. This information should not be construed as investment advice. 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. 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 other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. http://www.montoyaregistry.com http://www.petermontoya.com

Statler Financial Services, Inc. is registered as an investment adviser with the state of Florida. The presence of this Web site on the Internet shall in no direct or indirect way to be construed or interpreted to suggest Statler Financial Services, Inc. is soliciting to sell advisory services or offering to sell advisory services to residents of any other state other than the state of Florida.

Citations.

1 – money.cnn.com/2010/08/06/news/economy/jobs_july/ [8/6/10]

2 – dailyfinance.com/story/investing/services-sector-index-unexpectedly-rose-in-july/19580447/ [8/4/10]

3 – thestreet.com/story/10823959/1/ism-index-growth-slows-to-555.html [8/2/10]

4 – reuters.com/article/idUSN023868020100803 [8/4/10]

5 – suntimes.com/business/currency/2563780,CST-NWS-savings04.article [8/4/10]

6 – seattletimes.nwsource.com/html/businesstechnology/2012519621_apuspendinghomesales.html [8/3/10]

7 – online.wsj.com/article/SB10001424052748703748904575411193528926092.html [8/6/10]

8 – cnbc.com/id/38596993 [8/6/10]

9 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=8%2F6%2F09&x=0&y=0 [8/6/10]

9 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=8%2F6%2F09&x=0&y=0 [8/6/10]

9 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=8%2F6%2F09&x=0&y=0 [8/6/10]

9 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=8%2F5%2F05&x=0&y=0 [8/6/10]

9 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=8%2F5%2F05&x=0&y=0 [8/6/10]

9 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=8%2F5%2F05&x=0&y=0 [8/6/10]

9 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=8%2F7%2F00&x=0&y=0 [8/6/10]

9 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=8%2F7%2F00&x=0&y=0 [8/6/10]

9 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=8%2F7%2F00&x=0&y=0 [8/6/10]

10 – ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [8/6/10]

10 – ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [8/6/10]

11 – treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [7/12/00]

Weekly Economic Update for the Week of April 5, 2010

Job growth at last. Employers added 162,000 jobs in March, the biggest gain in three years. While some of the increase reflected temporary hires for the U.S. Census, private payrolls swelled by 123,000 last month. The jobless rate was 9.7% in March, exactly where it had been in January and February.¹

Consumer spending up by 0.3%. February’s gain was in line with the forecast of economists. Wages were flat last month after a 0.1% increase in January.²

Is consumer confidence flat, or rising? Two polls tell two stories. The Conference Board’s March Consumer Confidence Index hit 52.5, up from 46.4 in February. In contrast, the March Reuters survey remained at 73.6, unchanged from February.^3,4

Factory orders up 0.6%. The February number represented the tenth gain in the last 11 months. Excluding the defense category, the gain was 1.0%.⁵

Home prices inch higher. The January S&P/Case-Shiller home price index (of 20 major real estate markets) showed prices up 0.3% for January and down just 0.7% from 12 months earlier, the smallest year-over-year drop in nearly three years.³

Stocks have been red hot. At the close on April 1, the Dow, S&P 500 and NASDAQ had respectively gained 5.83%, 6.66% and 7.34% in a 5-week period. Thursday, the DJIA finished at 10,927.07, its highest close since September 28, 2008. Wall Street trading paused for a day in observance of Good Friday.⁶

(Source: CNBC.com, BigCharts.com, ustreas.gov, bls.gov, 4/2/10)^7,8,9,10
Indices are unmanaged, do not incur fees or expenses, and cannot be
invested into directly. These returns do not include dividends.
___________________________________________________________________

These views are those of Peter Montoya Inc., and not Statler Financial Services, Inc., and should not be construed as investment advice. 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. 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 other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. http://www.montoyaregistry.com http://www.petermontoya.com
Statler Financial Services, Inc. is registered as an investment adviser with the state of Florida. The presence of this Web site on the Internet shall in no direct or indirect way to be construed or interpreted to suggest Statler Financial Services, Inc. is soliciting to sell advisory services or offering to sell advisory services to residents of any other state other than the state of Florida

Citations.
1 businessweek.com/news/2010-04-02/geithner-says-u-s-economy-entering-sustainable-growth-period.html [4/2/10]
2 forbes.com/2010/03/29/briefing-americas-open-markets-economy-consumer-spending.html [3/29/10]
3 npr.org/blogs/thetwo-way/2010/03/consumer_confidence_home_price.html [3/21/10]
4 blogs.barrons.com/stockstowatchtoday/2010/03/26/consumer-sentiment-i-know-somebody-must-be-doing-well/ [4/2/10]
5 fxstreet.com/fundamental/economic-indicators/us-factory-orders-rise/2010-04-01.html [4/1/10]
6 blogs.wsj.com/marketbeat/2010/04/01/data-points-us-markets-224/ [4/1/10]
7 cnbc.com/id/36147826 [4/2/10]
8 bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=3%2F26%2F09&x=0&y=0 [4/2/10]
8 bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=3%2F26%2F09&x=0&y=0 [4/2/10]
8 bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=4%2F2%2F09&x=0&y=0 [4/2/10]
8 bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=4%2F1%2F05&x=0&y=0 [4/2/10]
8 bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=4%2F1%2F05&x=0&y=0 [4/2/10]
8 bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=4%2F1%2F05&x=0&y=0 [4/2/10]
8 bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=4%2F3%2F00&x=0&y=0 [4/2/10]
8 bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=4%2F3%2F00&x=0&y=0 [4/2/10]
8 bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=4%2F3%2F00&x=0&y=0 [4/2/10]
9 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [4/2/10]
9 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [4/2/10]
10 treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [1/12/00]

Weekly Economic Update for the Week of March 1, 2010

Stocks log best month since November. The S&P 500 rose 2.85% last month even with worries over Greece, China and the U.S. housing and job markets. The S&P had its best February in 12 years.^1,2

4Q GDP revised to 5.9%. That tops the initial 5.7% estimate from the Commerce Department. It means 4Q 2009 was the strongest quarter since 3Q 2003.³

Home sales in deep freeze. The January numbers were very poor: -7.2% for residential resales, -11.2% for new homes. However, existing home sales were 11.5% above where they had been a year before.⁴

Case-Shiller index: home prices rising. The widely watched 20-city home price index posted its seventh straight monthly gain in December. Prices increased in 15 of the index’s 20 metro areas.⁵

Durable goods orders up 3.0%. The January figure from the Commerce Department was hugely positive. Yet with transportation orders factored out, durable goods orders were down 0.6%.⁵

Less confidence last month? The February Conference Board index of consumer confidence fell to 46.0 from 55.9 in January. The index’s assessment of current conditions was the lowest since 1983.⁶

Soft week but strong month. The major U.S. indexes lost from 0.25% (NASDAQ) to 0.74% (Dow) last week. Monthly gains were quite strong: DJIA, +2.56%; NASDAQ, +4.23%; S&P 500, +2.85%.¹

% Change	Y-T-D	1-Yr Chg	5-Yr Avg	10-Yr Avg
DJIA	-0.99	+43.76	-0.95	+0.47
NASDAQ	-1.36	+60.86	+1.67	-5.12
S&P 500	-0.95	+46.71	-1.76	-1.72
Real Yield	2/26	1 Yr Ago	5 Yrs Ago	10 Yrs Ago
10YrTIPS	1.48%	2.02%	1.64%	4.34%

(Source: CNBC.com, CNNMoney.com, ustreas.gov, bls.gov, 2/26/10)^1,7,8,9

Indices are unmanaged, do not incur fees or expenses, and cannot be

invested into directly. These returns do not include dividends.

___________________________________________________________________

These views are those of Peter Montoya Inc., and not Statler Financial Services, Inc., and should not be construed as investment advice. 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. 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. The 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 other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards.

Statler Financial Services, Inc. is registered as an investment adviser with the state of Florida. The presence of this Web site on the Internet shall in no direct or indirect way to be construed or interpreted to suggest Statler Financial Services, Inc. is soliciting to sell advisory services or offering to sell advisory services to residents of any other state other than the state of Florida.

Citations

1 cnbc.com/id/35601889 [2/26/10]
2 cnbc.com/id/35607823 [2/26/10]
3 online.wsj.com/article/SB10001424052748704625004575089030822996718.html?mod=WSJ_hpp_LEFTWhatsNewsCollection [2/26/10]
4 latimesblogs.latimes.com/money_co/2010/02/sales-of-existing-homes-fall-72-in-january.html [2/26/10]
5 sfgate.com/cgi-bin/article.cgi?f=/n/a/2010/02/23/financial/f112032S90.DTL [2/23/10]
6 smartmoney.com/investing/economy/the-other-consumer-confidence-index/ [2/26/10]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=2%2F26%2F09&mode=add&symb=DJIA [2/26/10]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=2%2F25%2F05&mode=add&symb=DJIA [2/26/10]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=2%2F25%2F00&mode=add&symb=DJIA [2/26/10]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=2%2F26%2F09&mode=add&symb=COMP [2/26/10]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=2%2F25%2F05&mode=add&symb=COMP [2/26/10]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=2%2F25%2F00&mode=add&symb=COMP [2/26/10]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=2%2F26%2F09&mode=add&symb=SPX [2/26/10]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=2%2F25%2F05&mode=add&symb=SPX [2/26/10]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=2%2F25%2F00&mode=add&symb=SPX [2/26/10]
8 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [2/26/10]
8 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [2/26/10]
9 treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [1/12/00]

Weekly Economic Update for the Week of February 1, 2010

4Q GDP: 5.7%: That is the preliminary reading from the Commerce Department, and that is the best reading since 3Q 2003. Economists pointed out that much of the increase reflected companies rebuilding their inventories rather than personal spending.¹

Consumers think positive. The final University of Michigan/Reuters consumer sentiment index for January improved 1.6 points to 74.4. Economists polled by Briefing.com felt it would come in at 73.0.²

New concerns about home sales. Both new and existing home sales retreated markedly in December with the threat of federal tax credits being pulled. Existing home sales fell by 16.7% in that month while new home sales slipped 7.6%. In annual terms, residential resales for 2009 were about 5% higher than 2008 totals. Just 373,000 new single-family homes were sold in 2009, the fewest since the government began tracking sales stats in 1963.^3,4

A $5K hiring rebate? Last week, President Obama pitched the idea of giving companies of all sizes a $5,000 credit to offset payroll taxes for each new worker, up to a $500,000 ceiling. Net new hires (increasing employee hours) and salary increases could also make companies eligible. A proposal to enact the plan is now in the Senate.⁵

Dollar hits highest level since August. The buck went on an intraday climb to 90.92 yen and the euro traded below $1.39. The new GDP report helped.⁶

So long to a subpar month. Stocks retreated in the last week of January, with the Dow ending the month at 10,067.33, the NASDAQ at 2,147.35 and the S&P 500 at 1,073.87.⁷

% Change	Y-T-D	1-Yr Chg	5-Yr Avg	10-Yr Avg
DJIA	-3.46	+23.54	-0.69	-0.63
NASDAQ	-5.37	+42.41	+1.10	-4.48
S&P 500	-3.70	+27.06	-1.66	-2.10
Real Yield	1/29	1 Yr Ago	5 Yrs Ago	10 Yrs Ago
10YrTIPS	1.30%	1.83%	1.65%	4.34%

(Source: CNBC.com, CNNMoney.com, ustreas.gov, bls.gov, 1/29/10)^7,8,9,10

Indices are unmanaged, do not incur fees or expenses, and cannot be

invested into directly. These returns do not include dividends.

___________________________________________________________________

These views are those of Peter Montoya Inc., and not Statler Financial Services, and should not be construed as investment advice. 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. 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. The 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 other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards.

Statler Financial Services, Inc. is registered as an investment adviser with the state of Florida. The presence of this Web site on the Internet shall in no direct or indirect way to be construed or interpreted to suggest Statler Financial Services, Inc. is soliciting to sell advisory services or offering to sell advisory services to residents of any other state other than the state of Florida.

Citations.
1 pbs.org/newshour/rundown/2010/01/us-economy-expands-at-fastest-rate-in-six-years.html [1/29/10]
2 money.cnn.com/2010/01/29/markets/markets_newyork/ [1/29/10]
3 money.cnn.com/2010/01/27/real_estate/new_home_sales/ [1/27/10]
4 nytimes.com/2010/01/30/business/economy/30charts.html [1/29/10]
5 time.com/time/business/article/0,8599,1957663,00.html?xid=rss-topstories [1/29/10]
6 cnbc.com/id/35136215/ [1/29/10]
7 cnbc.com/id/35017549 [1/29/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F29%2F09&mode=add&symb=DJIA [1/29/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F28%2F05&mode=add&symb=DJIA [1/29/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F28%2F00&mode=add&symb=DJIA [1/29/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F29%2F09&mode=add&symb=COMP [1/29/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F28%2F05&mode=add&symb=COMP [1/29/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F28%2F00&mode=add&symb=COMP [1/29/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F29%2F09&mode=add&symb=SPX [1/29/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F28%2F05&mode=add&symb=SPX [1/29/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F28%2F00&mode=add&symb=SPX [1/29/10]
9 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [1/29/10]
9 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [1/29/10]
10 treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [1/12/00]

How Fast the Markets Recover

A look at how the markets have rebounded through the years.

The stock market is amazingly resilient. You might be surprised at how fast the stock market can change … for the better. Let’s look at how the market has recovered remarkably – and quickly – from some notable downturns.

2008-2009. The collapse of the subprime mortgage markets triggered a recession and made 2008 the poorest year for stocks since 1931. The Dow Jones Industrial Average fell 10% in June 2008 and fell 10% again in October 2008, losing 19.12% for the year. On March 9, 2009, the major U.S. indices closed at 12-year lows with the S&P 500 at 676.53.^1,2,3

Then the market took off. Investors who swore off stocks in early 2009 lost out on one of the great rallies. From the March 9 lows to the end of 2009, the S&P 500 soared 64.83% while the NASDAQ gained 78.87% and the Dow gained 59.28%.⁴

2001-2002. After the four-day closure of the stock market following 9/11, the Dow fell 685 points to 8,920 on September 17. It kept falling, losing 14.26% in a week to close at 8,235 on September 21. But what happened next? A huge gain. The Dow closed 2001 at 10,021 – a 21% rebound in less than three months.⁵

There were more challenges ahead. On October 9, 2002, the Dow had fallen to 7,286. But on Halloween, the Dow sat at 8,397 – a 10.6% gain in 22 days.⁵

As for the people who panicked and bailed out of the stock market, they ended up kicking themselves: in 2003, the DJIA gained 25.3%, the S&P 500 26.4%, and the NASDAQ 50%.⁶

1987. October 19 was Black Monday: in a contagion of selling exacerbated by unchecked computer technology, the Dow lost 22.6% in one day, falling to 1,738, a 508-point loss.⁷ (That would be akin to a 2,400-point one-day drop today.) The S&P 500 lost 20.4%.⁸ By comparison, the initial “Black Monday”, the stock market crash of 1929, represented a 12.8% market loss.⁹

Then the recovery kicked in. During the next two trading days, the Dow gained nearly 300 points – and it closed 1987 at 1,939, gaining back all of the loss and ending up 2% for the year.¹⁰ By January 1990, the DJIA was at 2,800.¹¹

If you were fortunate enough to invest $1,000 in the S&P 500 index at the close of Black Monday and reinvested your dividends, you would have wound up with about $10,800 20 years later.⁷ If you had invested in the Dow stocks a week before Black Monday, you would have lost 30% on your investment in the crash … but if you held on, your investment would have gained 462% over the next 20 years.¹⁰

1974. With investors fretting over rising inflation and the energy crisis, the Dow loses 30% of its value during the first three quarters of the year. Suddenly, the Dow gains 16% in October.¹² In early December 1974, the Dow is at 577; in July 1976, it hits 1,011.⁵

So while the Dow, S&P and NASDAQ have been through some rough periods (and even a poor decade), the important thing is how they have climbed historically.

On August 12, 1982, the Dow was at 777. On January 14, 2000, it was at 11,722.98. That’s a 1,500% gain in 17½ years.¹³ This is why people stay in the market through the downturns. This is what the market is capable of achieving. There are periodic descents, but history is definitely on an investor’s side.

These are the views of Peter Montoya Inc., not Statler Financial Services, and should not be construed as investment advice. Neither Statler Financial Services nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information.

Statler Financial Services, Inc. is registered as an investment adviser with the state of Florida. The presence of this Web site on the Internet shall in no direct or indirect way to be construed or interpreted to suggest Statler Financial Services, Inc. is soliciting to sell advisory services or offering to sell advisory services to residents of any other state other than the state of Florida.

Citations.

1 cnbc.com/id/28451744 [12/31/08]
2 allheadlinenews.com/articles/7013587460 [1/3/09]
3 money.cnn.com/2009/03/09/markets/markets_newyork/index.htm [3/9/09]
4 cnbc.com/id/34645043 [12/31/09]
5 the-privateer.com/chart/dow-long.html [6/30/08]
6 upi.com/Business_News/2003/12/31/UPI_NewsTrack_Business/UPI-75601072911443/ [12/31/03]
7 sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/10/18/BUODSRIN6.DTL&type=printable [10/18/07]
8 foreignpolicy.com/story/cms.php?story_id=4026 [10/07]
9 money.cnn.com/2004/10/26/markets/1929crash/ [10/26/04]
10 articles.moneycentral.msn.com/Investing/Dispatch/BlackMonday20YearsAfter.aspx [10/19/07]
11 answers.com/topic/closing-milestones-of-the-dow-jones-industrial-average [7/3/08]
12 money.cnn.com/2008/06/27/markets/bear_market.moneymag/index.htm [6/27/08]
13 answers.com/topic/closing-milestones-of-the-dow-jones-industrial-average [7/3/08]

Weekly Economic Update for the Week of January 18, 2010

How about a too-big-to-fail tax? Last week, President Obama proposed a Financial Crisis Responsibility Fee – a tax on the largest U.S. banks to help repay $117 billion in TARP losses. Would banks respond to this populist move with higher lending fees for customers? Or would executives and shareholders effectively bear the cost? One certainty: designated banks would have to pay the fee for 10 years or longer.¹

CPI slightly up, retail sales slip down. The Consumer Price Index inched north 0.1% in December. That puts it up 2.7% over the last 12 months, with core CPI up 1.8% in that span. Retail sales fell 0.3% last month, with the decline ranging across many sectors; economists polled by MarketWatch had expected a gain of 0.5%.^2,3

Cool consumer sentiment. The preliminary January Reuters/University of Michigan survey came in at 72.8. That was less than the 75.0 economists had hoped for, yet higher than the 72.5 December mark.⁴

Industrial output up again. The Federal Reserve noted a 0.6% advance in December, with utilities behind most of that gain. Industrial production has risen for six straight months.⁵

Oil back under $80 a barrel. Crude futures slipped more than 5% for the week on reduced demand projections with warmer weather. Oil prices fell 1.8% Friday to close at $78.00 per barrel on the NYMEX.⁶

Fears of fees affect the market. The second full trading week of the year was not as great as the first. The Dow lost 0.08%; the S&P 500 retreated 0.78%. Even with these losses, the Dow and S&P wrapped up their best 2-week stretches since mid-November.⁷

% Change	Y-T-D	1-Yr Chg	5-Yr Avg	10-Yr Avg
DJIA	+1.74	+29.19	+0.10	-0.95
NASDAQ	+0.83	+51.34	+1.92	-4.37
S&P 500	+1.88	+34.64	-0.82	-2.25
Real Yield	1/15	1 Yr Ago	5 Yrs Ago	10 Yrs Ago
10YrTIPS	1.34%	1.78%	1.72%	4.34%

(Source: CNNMoney.com, ustreas.gov, bls.gov, 1/8/10)^6,8,9,10

Indices are unmanaged, do not incur fees or expenses, and cannot be

invested into directly. These returns do not include dividends.

___________________________________________________________________

These views are those of Peter Montoya Inc., and not Statler Financial, and should not be construed as investment advice. 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. 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. The 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 other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards.

Statler Financial Services, Inc. is registered as an investment adviser with the state of Florida. The presence of this Web site on the Internet shall in no direct or indirect way to be construed or interpreted to suggest Statler Financial Services, Inc. is soliciting to sell advisory services or offering to sell advisory services to residents of any other state other than the state of Florida.

Citations.
1 csmonitor.com/USA/Politics/2010/0114/Bailout-aftermath-Obama-proposes-fee-on-big-banks [1/14/10]
2 money.cnn.com/2010/01/15/news/economy/consumer_prices_december/ [1/15/10]
3 marketwatch.com/story/retail-sales-drop-03-on-widespread-declines-2010-01-14?dist=beforebell [1/14/10]
4 smartmoney.com/investing/short-term-investing/market-update-friday-jan-15-2010-20844/ [1/15/10]
5 marketwatch.com/story/industrial-output-leans-on-a-cold-shoulder-2010-01-15 [1/15/10]
6 money.cnn.com/2010/01/15/markets/oil/ [1/15/10]
7 cnbc.com/id/34880099 [1/15/10]
8 money.cnn.com/data/markets/dow/ [1/15/10]
8 money.cnn.com/data/markets/nasdaq/ [1/15/10]
8 money.cnn.com/data/markets/sandp/ [1/15/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F15%2F09&mode=add&symb=DJIA [1/15/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F14%2F05&mode=add&symb=DJIA [1/15/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F14%2F00&mode=add&symb=DJIA [1/15/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F15%2F09&mode=add&symb=COMP [1/15/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F14%2F05&mode=add&symb=COMP [1/15/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F14%2F00&mode=add&symb=COMP [1/15/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F15%2F09&mode=add&symb=SPX [1/15/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F14%2F05&mode=add&symb=SPX [1/15/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F14%2F00&mode=add&symb=SPX [1/15/10]
9 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [1/15/10]
9 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [1/15/10]
10 treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [1/12/00]

Weekly Economic Update for the Week of December 28, 2009

Another strong consumer spending gain. The Commerce Department announced consumer spending rose 0.5% in November, following a 0.6% increase in October. Personal incomes rose in November by the most in six months.¹

Hashing out the home sales data. New home sales fell 11.3% last month, undoubtedly affected by the perception that the first-time buyer credit would expire. Existing home sales soared by 7.4% as buyers scrambled to meet the possible deadline. The median price for an existing home was $172,600 last month compared to $217,400 for a new one – that certainly also helped residential resales.^2,3

Health care reform clears Senate. On Christmas Eve, Senate Democrats got the 60 votes needed to pass that chamber’s version of a historic health care reform bill. The House and Senate will work to reconcile their respective bills next month.⁴

Mortgage rates edge above 5%. Freddie Mac has average rates on 30-year FRMs at 5.05% in its latest survey. Over the weekend, its deputy chief economist Amy Crews Cutts told the Washington Post that “anything we get at or below 5% is a gift at this point.” She thinks rates will hit 6% by the end of 2010.⁵

Catching up with gold & oil. Last Thursday, gold posted a gain of $10.80 to reach $1,104.80 per ounce. With the dollar strengthening, gold prices fell about $123 during December 3-24. Oil prices ended the week at $78.05, rising about 5% in 3.5 market days.⁶

Lower volumes, higher stocks. Santa Claus dropped by Wall Street – the Dow ascended almost 2% to end a relatively quiet week at 10,520.10. The NASDAQ closed at 2,285.69 Thursday; the S&P 500 closed at 1,126.48.⁷

% Change	Y-T-D	1-Yr Chg	5-Yr Avg	10-Yr Avg
DJIA	+19.87	+24.23	-0.57	-0.78
NASDAQ	+44.94	+49.89	+1.16	-4.24
S&P 500	+24.71	+29.76	-1.38	-2.28
Real Yield	12/24	1 Yr Ago	5 Yrs Ago	10 Yrs Ago
10YrTIPS	1.50%	2.07%	1.62%	4.14%

(Source: CNNMoney.com, ustreas.gov, bls.gov, 12/24/09)^8,9,10

Indices are unmanaged, do not incur fees or expenses, and cannot be

invested into directly. These returns do not include dividends.

___________________________________________________________________

These views are those of Peter Montoya Inc., and not Statler Financial Services, and should not be construed as investment advice. 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. 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. The 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 other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards.

Statler Financial Services, Inc. is registered as an investment adviser with the state of Florida. The presence of this Web site on the Internet shall in no direct or indirect way to be construed or interpreted to suggest Statler Financial Services, Inc. is soliciting to sell advisory services or offering to sell advisory services to residents of any other state other than the state of Florida.

Citations.
1 abcnews.go.com/Business/wireStory?id=9408799 [12/23/09]
2 marketwatch.com/story/new-home-sales-crater-as-subsidy-ends-2009-12-23 [12/23/09]
3 blogs.wsj.com/developments/2009/12/23/why-us-home-sales-are-both-up-and-down/ [12/23/09]
4 cbsnews.com/stories/2009/12/24/politics/main6017779.shtml [12/24/09]
5 washingtonpost.com/wp-dyn/content/article/2009/12/26/AR2009122600031.html [12/26/09]
6 abcnews.go.com/Business/wireStory?id=9419535 [12/24/09]
7 cnbc.com/id/34584961 [12/24/09]
8 money.cnn.com/data/markets/dow/ [12/24/09]
8 money.cnn.com/data/markets/nasdaq/ [12/24/09]
8 money.cnn.com/data/markets/sandp/? [12/24/09]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F24%2F08&mode=add&symb=DJIA [12/24/09]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F24%2F04&mode=add&symb=DJIA [12/24/09]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F24%2F99&mode=add&symb=DJIA [12/24/09]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F18%2F08&mode=add&symb=COMP [12/24/09]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F24%2F04&mode=add&symb=COMP [12/24/09]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F24%2F99&mode=add&symb=COMP [12/24/09]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F24%2F08&mode=add&symb=SPX [12/24/09]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F24%2F04&mode=add&symb=SPX [12/24/09]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F24%2F99&mode=add&symb=SPX [12/24/09]
9 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [12/24/09]
9 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [12/24/09]
10 treasurydirect.gov/instit/annceresult/press/preanre/1999/ofn100699.pdf [10/6/99]

Weekly Economic Update for the Week of December 21, 2009

Interesting inflation figures. November data shows a 1.8% year-over-year gain in the Consumer Price Index. That’s the first positive 12-month change since February 2009. Core CPI was flat last month; it had risen for 10 straight months. The overall CPI rose 0.4% in November. Wholesale inflation (PPI) jumped by 1.8% last month, with core PPI rising 0.5%.¹

Housing starts rebound. They hit a 6-month low in October, so November’s 8.9% increase was especially welcome. Building permits also increased by 6.0% from October levels.²

Fed sees no reason to raise rates. Last week, TIME’s Person of the Year and his colleagues voted 10-0 to leave the benchmark interest rate alone at between 0% and 0.25%. The Federal Open Market Committee said that the key rate would remain at record lows for “an extended period” as “economic activity is likely to remain weak for a time.”³

Citi, Wells Fargo will pay back Uncle Sam. The two banks will respectively repay $20 million and $25 million to the Treasury. With the Wells Fargo notice, America’s largest banks have all now pledged to exit TARP. The Obama administration claims the final TARP price tag will be under $140 billion.⁴

Leading indicators up 0.9%. For the eighth month in a row, the Conference Board’s index of leading indicators chalked up an advance. Economists polled by Bloomberg News had predicted a 0.7% rise.⁵

Tech stocks do well in mixed week. The NASDAQ rose 0.98% last week, pushing its YTD gain over 40%. The S&P 500 slipped 0.35% last week, while the DJIA fell 1.33%.⁶

% Change	Y-T-D	1-Yr Chg	5-Yr Avg	10-Yr Avg
DJIA	+17.69	+20.03	-0.60	-0.82
NASDAQ	+40.24	+42.47	+0.72	-4.11
S&P 500	+22.06	+24.53	-1.54	-2.24
Real Yield	12/18	1 Yr Ago	5 Yrs Ago	10 Yrs Ago
10YrTIPS	1.31%	1.85%	1.64%	4.14%

(Source: CNNMoney.com, ustreas.gov, bls.gov, 12/18/09)^7,8,9

Indices are unmanaged, do not incur fees or expenses, and cannot be

invested into directly. These returns do not include dividends.

___________________________________________________________________

These views are those of Peter Montoya Inc., and not Statler Financial Services, and should not be construed as investment advice. 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. 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. The 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 other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards.

Statler Financial Services, Inc. is registered as an investment adviser with the state of Florida. The presence of this Web site on the Internet shall in no direct or indirect way to be construed or interpreted to suggest Statler Financial Services, Inc. is soliciting to sell advisory services or offering to sell advisory services to residents of any other state other than the state of Florida.

Citations.
1 marketwatch.com/story/us-consumer-prices-rise-04-in-november-2009-12-16-83900 [12/16/09]
2 money.cnn.com/2009/12/16/real_estate/housing_starts_November/ [12/16/09]
3 chicagotribune.com/business/chi-tc-biz-fed-1216-1217-dec17,0,3451436.story [12/17/09]
4 bloomberg.com/apps/news?pid=20601103&sid=aPQBGLJzpoMw [12/15/09]
5 bloomberg.com/apps/news?pid=20601087&sid=akvvvBaeSYYs&pos=1 [12/17/09]
6 cnbc.com/id/34382988 [12/18/09]
7 money.cnn.com/data/markets/dow/ [12/18/09]
7 money.cnn.com/data/markets/nasdaq/ [12/18/09]
7 money.cnn.com/data/markets/sandp/? [12/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F18%2F08&mode=add&symb=DJIA [12/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F17%2F04&mode=add&symb=DJIA [12/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F17%2F99&mode=add&symb=DJIA [12/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F18%2F08&mode=add&symb=COMP [12/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F17%2F04&mode=add&symb=COMP [12/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F17%2F99&mode=add&symb=COMP [12/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F18%2F08&mode=add&symb=SPX [12/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F17%2F04&mode=add&symb=SPX [12/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F17%2F99&mode=add&symb=SPX [12/18/09]
8 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [12/18/09]
8 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [12/18/09]
9 treasurydirect.gov/instit/annceresult/press/preanre/1999/ofn100699.pdf [10/6/99]