Market Commentary January 7, 2013 The Markets: 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year

Market Commentary January 7, 2013 The Markets
Global markets celebrated the New Year on Wednesday with a rally in appreciation of the U.S. fiscal cliff agreement, now known as The American Taxpayer Relief Act of 2012 (ATRA). Many European, Asian, and American markets closed the day sharply higher. The FTSE 100 was up 2.2 percent, Hong Kongs Hang Seng was up 2.9 percent, Brazils Bovespa was up 2.6 percent, and the Dow Jones Industrials Index was up 2.4 percent for the day. While markets embraced ATRA with unabashed enthusiasm, pundits were less keen on the new law. They greeted the changes with the excitement or lack thereof many readers reserve for books with cliffhanger endings. Thats because ATRA failed to resolve key issues related to the fiscal cliff, including automatic spending cuts and the debt ceiling limit. As a result, Americans can soon expect new additions to the fiscal cliff series. The next, which may be called the Debt Ceiling Debacle, will undoubtedly be accompanied by considerable melodrama and bipartisan bickering. On Thursday, U.S. stock markets faltered after the minutes of the Federal Reserve Open Market Committee meeting were released. The Fed has promised to continue quantitative easing indefinitely; however, the minutes included considerable discussion about ending the program during 2013. That notion spooked Treasury investors and the yield on 10-year Treasuries rose to 1.9 percent. On Friday, the unemployment report showed the jobless rate unchanged at 7.8 percent. Stock markets bounced higher as investors appeared to interpret the news as an indication the U.S. economy is not yet strong enough for the Fed to end quantitative easing. However, the news that some at the Fed thought easing should end caused gold to drop to its lowest in two weeks. For the week, the S&P 500 was up 4.6 percent, the Dow Jones Industrials were up 3.8 percent, and the NASDAQ rose by 4.8 percent.
Data as of 1/4/13
Standard & Poor's 500 (Domestic Stocks) DJ Global ex US (Foreign Stocks) 10-year Treasury Note (Yield Only) Gold (per ounce) DJ-UBS Commodity Index DJ Equity All REIT TR Index
1-Week Y-T-D 4.6% 2.8% 1.9 1.9 -0.6 -1.0 2.9 1.9 N/A -2.7 -1.0 1.7
1-Year 3-Year 5-Year 10-Year 14.8% 9.0% 0.77% 4.9% 17.1 2.0 2.2 -4.7 22.7 4.6 3.8 13.7 -1.1 18.8 -1.6 3.9 14.0 -6.2 7.7 10.4 4.0 16.7 2.0 11.7
Notes: S&P 500, DJ Global ex US, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance, djindexes.com, London Bullion Market Association. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means Not Applicable.
The Year in Review

2012 was a surprising year. Although many of the most notable events reflected ongoing economic and fiscal issues including crises in the European Union, slowing growth in China, growing debt in the United States, government intervention in Brazil, and worries about fiscal cliff investors remained optimistic and many global stock markets delivered rather attractive performance for the year. Here are a few of the headline events which caught our attention during 2012: China became an economic power, officially All debate about when Chinas economic importance would rival that of the United States was put to rest when The Economist added a section devoted entirely to China. The last time the publication introduced a new country was 1942. It was devoted to The United States. Its all relative: the U.S. and global recovery Chinas growing importance did not diminish the role of the United States. U.S. economic growth may have been modest during 2012, but it was positively robust relative to that of other developed nations. In fact, the U.S. was called the sole bright spot in global economic recovery. Greece? Really? Greeces ATHEX composite index was the top-performing stock market in Europe during 2012. Despite five years of recession and record unemployment, it closed about 33 percent higher at years end, beating Germanys DAX. The ATHEX remained significantly below its previous highs. For Euro Crisis Relief Bang Head Here Bloomberg BusinessWeeks tongue-in-cheek headline reflected ongoing frustration with events in Europe. While Europe faces complicated issues that are likely to take time to resolve, there are reasons for optimism including the regions pursuit of a banking union. The Supreme Court did what? Offering headlines that rivaled the memorable Dewey Beats Truman, both CNN and Fox News misreported the Supreme Courts ruling on the Affordable Care Act. The Act remains controversial. Like a phoenix, Bank of America rose from the ashes After delivering the worst performance in the Dow Jones Industrial Average during 2011, Bank of America became the best performer for 2012. One of the biggest beneficiaries was Warren Buffet who stepped in when no one else would. He invested $5 billion in preferred shares and received 700 million in warrants.
Not ready for prime time: NFL replacement officials Early in the season, pundits tried to identify the biggest blunders made by the NFLs temporary referees each week. It wasnt easy. From cheap shots to reviews for teams that had no time outs to the infamous simultaneous catch call, the temporary refs made fans appreciate the real thing. Australian police said Apple Maps can kill you Apple maps were called a lot of things during 2012, but accurate was not one of them. San Francisco had a French Quarter, Stratford-on-Avon disappeared, and the town of Mildura moved to the middle of Australias Murray Sunset National Park. Since the park has no water supply, Australian police issued a warning.
Weekly Focus Think About It

Don't tell people how to do things, tell them what to do and let them surprise you with their results. --George S. Patton, U.S. Army general
Happy New Year!
Best regards,
Patty Loris, MBA, CFP LPL Financial Advisor
P.S. Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added. Securities offered through LPL Financial, Member FINRA/SIPC.
* This newsletter was prepared by Peak Advisor Alliance. * The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. * The DJ Global ex US is an unmanaged group of non-U.S. securities designed to reflect the performance of the global equity securities that have readily available prices. * The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association. Precious metal investing is subject to substantial fluctuation and potential for loss. * The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. * The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. * Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. * Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. * Past performance does not guarantee future results. * You cannot invest directly in an index. * Consult your financial professional before making any investment decision. * To unsubscribe from the Patty Loris Weekly Commentary please reply to this e-mail with
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Market Commentary January 7, 2013 The Markets

The Year in Review

Weekly Focus Think About It

Happy New Year!

Patty Loris, MBA, CFP LPL Financial Advisor

Unsubscribe in the subject line.

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