A note from us to you… U.S. founding father Thomas Paine wrote: “The real man smiles in trouble, gathers strength from distress, and grows brave by reflection.” As we ponder the experiences of 2010, we cannot help but see timeless value in his words.
As one year draws to a close and the next unfolds before us, we are moved to reflect on the people and experiences that brought us to this point. Such reflection is essential because it helps us to be thankful for what we have, to grow in acuity, and to make prudent plans for the future.
From our perspective, providing you with sound financial guidance is about much more than numbers. It is about helping you „smile in times of trouble and gather strength in times of distress.‟ More than that, it is about helping you „reflect‟ on your personal experiences and aspirations so you can convert those into worthwhile, attainable goals for the future.
From the day we started working together, your goals became our goals; your trials, our trials. We consider it a privilege to serve you in this capacity, and we hope that you enjoy working with us as much as we enjoy working with you.
Thank you for all that you do. We look forward to continually growing our relationship in the years ahead!
The final weeks of the year are traditionally light for the markets and 2010 is no exception so far. Thursday closed the week on a quiet note as the Dow rose a stingy 0.1%, and the three major indexes only moved about 1% higher for the week.1 Leading up to the Christmas holiday, it seems that both stocks and traders slipped quietly into vacation.
While gains have been modest in recent weeks, stocks are still on track to post double-digit increases for the year. And with good news surrounding consumer spending and consumer sentiment, the economy appears to have earned a break. The Commerce Department said spending rose 0.4% in November, slightly higher than economists had predicted, and experts calculate that the 2% cut in employee‟s 2011 payroll taxes may fuel further spending in the year ahead. Interestingly, even if spending doesn’t increase at all in December, it is on track to grow at an inflation-adjusted 4% annual rate in the fourth quarter, which would mark its fastest pace since 2006. “It looks like we’ve transitioned into a period of solid consumer spending,” said Barclay‟s Capital economist Dean Maki. “That makes it hard not to be optimistic about economic growth.”
Obviously there are still a number of hurdles for the economy to overcome. Despite a recent increase in new home sales, we are still contending with a depressed housing market that could further damage household finances, prompting people to cut back spending.2 And at more than $91 a barrel, recent price hikes have earned oil a lump of coal in its stocking too. With oil prices at their highest levels in over two years and gasoline selling for an average $3.01 per gallon, this has the potential to squeeze a few pocketbooks.3
Still, most of the economic news arrives just in time to offer fresh hope for the new year. Morgan Stanley economists boosted their fourth quarter GDP forecast to 4.5%,4 supported by the Commerce Department‟s report that total orders for durable goods, excluding transportation, rose 2.4%, the best performance since last March.5 This increase in production bodes well for employment, where the recent drop in initial unemployment claims6 offers an additional glimmer of hope.
All in all, the year has ended more positively than it began. Stay tuned for our 2010 recap due in the week ahead. See you next year!
ECONOMIC CALENDAR: Tuesday – Redbook, S&P Case-Shiller HPI, Consumer Confidence Wednesday – EIA Petroleum Status Report Thursday – Jobless Claims, Chicago PMI, Pending Home Sales Index, EIA Natural Gas, Farm Prices, Fed Balance Sheet, Money Supply Friday – U.S. Holiday: New Year‟s Day
China’s central bank has raised its interest rate for the second time in just over two months as the nation fights to keep inflation in check.7
The gap between the rich and the middle class is larger than it has ever been due to the bursting of the housing bubble. The richest 1% of U.S. households had a net worth 225 times greater than that of the average American household in 2009, according to analysis conducted by the Economic Policy Institute, a liberal think tank. That’s up from the previous record of 190 times greater, which was set in 2004.8
The number of food stamp recipients increased 16% over last year. This means that 14% of the population is now living on food stamps. That’s about 43 million people, or about one out of every seven Americans.9
Taxpayers who claim deductions for home-mortgage interest, gifts to charity and state and local taxes will have to wait until middle to late February to file their 2010 returns. The Internal Revenue Service attributed the late start of the filing season to changes in tax law for 2010 that were finished last week. The agency needs extra time to put processing systems in place, the IRS said Thursday.10
QUOTE OF THE WEEK: “The greater danger for most of us lies not in setting our aim too high and falling short; but in setting our aim too low, and achieving our mark.”– Michelangelo
RECIPE OF THE WEEK:
Succulent Fruit Spread
From: Better Homes and Gardens
Servings: Makes 14 to 16 servings.
Prep: 20 mins
Total: 40 mins
1 8-ounce container mascarpone cheese
2 ounces prosciutto, finely chopped (1/2 cup)
1/4 cup finely chopped dried apricots and/or figs
1/4 cup finely chopped walnuts 1 3-ounce package cream cheese, softened
Fresh herb sprigs (optional)
Blood orange, kumquat, or orange wedges (optional) Cantaloupe wedges, fresh strawberries, or other fresh fruit Crackers
1. Combine mascarpone cheese, prosciutto, apricots and/or figs, and nuts in a medium mixing bowl. Line a small bowl (1-1/2-cups capacity) or crock with plastic wrap. Pack cheese mixture into the lined container. Cover and chill for 2 to 4 hours.
2. To unmold, remove covering from bowl or crock, place a serving plate upside down over the bowl or crock, and invert. Lift off bowl or crock, and remove plastic wrap. Spread cream cheese over molded spread. Allow to stand at room temperature for 20 to 30 minutes before serving. Garnish with herbs and blood orange, kumquat, or orange wedges, if desired. Serve with fresh fruit and crackers. Makes 14 to 16 servings.
GOLF TIP OF THE WEEK:
PRACTICE THE RIGHT WAY
Comparatively few golfers know how to practice the right way. Like a round of golf itself, practice sessions should be properly planned and organized. In competitive play, accuracy rather than distance is of paramount importance. The golfer will do well to remember this when he works on his shots, whether he is practicing on a driving range or on a practice fairway at his club. Never practice without a target. You must give yourself some sort of standard by which to judge the success of your efforts. Try visualizing an average fairway in your mind and work to confine your shots to that limited area. Most fairways are at least 40 yards wide, so pick out a tree or some other marker and establish a 20-yard tolerance on either side of the target.
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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.
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