Maintaining a Long-Term Perspective

March 20th, 2016

Dear Valued Investor:

The ongoing market volatility and global growth concerns continue to challenge our confidence and ability to remain optimistic. The heightened volatility of the second half of 2015, which has carried over into 2016, has turned our focus toward the risks and away from the potential opportunities that may emerge. Although these episodes may seem difficult to weather in the short term, we must strive to direct our attention to our long-term goals and remain committed to them.

Yet today, the list of investor worries is a long one. U.S. economic growth during the final three months of 2015 was lackluster, fueling recession concerns. Domestic earnings have been falling. The Federal Reserve (Fed) seems intent on pursuing additional interest rate hikes, despite the message from financial markets that it might be a mistake. Oil prices may remain low for some time as we endure the slow process of supply adjustment, which suggests more energy company bankruptcies may be ahead. In addition, the uncertainty surrounding the U.S. presidential election may be weighing on confidence, as some of the candidates’ proposals are not perceived to be market-friendly.

Looking abroad, China has fumbled its attempts to intervene and stabilize its financial and currency markets as the bumpy transition to a more services-based, consumer-oriented economy continues. Meanwhile, China’s economy is probably growing at a rate closer to 5–6% than its reported 6.5–7%, based on the most reliable and timely economic data available. European economic growth has stalled and the health of European banks is being called into question, largely because of exposure to oil and China. Japan’s economy also contracted in the fourth quarter of 2015.

However, bright spots remain. The U.S. consumer and the services sector of the economy remain solid, evidenced by Friday’s (February 12) strong retail sales report for January 2016. Job gains have been steady and lifted wages, supporting consumer spending and home values. Low gas prices have also helped. Strength in the U.S. dollar, which has hurt exports and weighed on earnings for U.S-based multinational corporations, has abated. We also take some comfort in corporate fundamentals. Corporate profits are pausing—largely because of temporary factors—but are not collapsing. Excluding the commodity sectors, S&P 500 earnings are on track to rise a respectable 4% year over year in the fourth quarter of 2015 based on Thomson-tracked consensus estimates. Overall earnings are potentially poised to resume growth in the second half of 2016, and corporate balance sheets remain in excellent shape outside of the energy sector.

As disappointing as the start to this year has been, the year-to-date decline for the broad stock market, as measured by the S&P 500, is still less than the average maximum decline in any given calendar year (14%) or in any positive year (11%). Going back 40 years, the S&P 500 has been down 5% or more after the first six weeks of the year 10 other times besides this year. The rest of the year was down more than 10% only once, in 2008, so a big drop from here would be extremely rare by historical standards. Also keep in mind the long-term average gain for stocks is about 8%, which includes a lot of ups and downs.

It’s important to remember that the best investment opportunities are often at points when fear is at its highest, which is why we look at sentiment indicators to identify points where the sellers might be exhausted. This idea was captured well by Warren Buffett in October 2008 when he said, “Be fearful when others are greedy, and be greedy when others are fearful.” There is a lot of fear out there, suggesting that greed may be more profitable.

It’s important to continue to monitor a variety of market and economic indicators for signs of a recession, and the odds now remain low. Yet episodes of heightened volatility, such as we are experiencing now, do weigh on our confidence regarding what may lie ahead. What remains key to managing these market environments is maintaining a long-term perspective, staying diversified, and committing to a well-formulated investment plan.

Best regards,
Westside Investment Management

Market News

March 20th, 2016

The Markets

Both the large-cap Dow and S&P 500 posted gains for the fourth consecutive week, helped by a late rally at week’s end. The latest run of gains has pulled the Dow and S&P 500 to within 1.22% and 1.06% of their 2015 year-end levels. The Global Dow, possibly boosted by additional stimulus measures announced by the European Central Bank, gained 1.2% and is also closing in on its 2015 closing value. The midcaps also posted marginal gains of under 1%, and remain farthest away from their 2015 year-end levels compared to the other indexes listed here.

The price of crude oil (WTI) is clearly trending upward as the price increased again last week, closing the week at $38.49 a barrel, $2.16 ahead of the prior week’s closing price. The price of gold (COMEX) fell by last week’s end, selling at $1,251.10 by late Friday afternoon, down from the prior week’s closing price of $1,260.10. The national average retail regular gasoline price increased for the third week in a row, selling at $1.841 per gallon on March 7, 2016, $0.058 over the prior week’s price but $0.646 under a year ago.

Market/Index

2015 Close

Prior Week

As of 3/11

Weekly Change

YTD Change

DJIA

17425.03

17006.77

17213.31

1.21%

-1.22%

Nasdaq

5007.41

4717.02

4748.47

0.67%

-5.17%

S&P 500

2043.94

1999.99

2022.19

1.11%

-1.06%

Russell 2000

1135.89

1081.93

1087.56

0.52%

-4.25%

Global Dow

2336.45

2260.08

2287.17

1.20%

-2.11%

Fed. Funds rate target

0.25%-0.50%

0.25%-0.50%

0.25%-0.50%

0 bps

0 bps

10-year Treasuries

2.26%

1.87%

1.98%

11 bps

-28 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Headlines

· In a further effort to boost its sagging economy, the European Central Bank initiated additional stimulus moves intended to spur the eurozone’s low inflation. Only three months after instituting similar–though less comprehensive measures–the latest ECB program includes cutting interest rates and increasing its monthly bond purchases. ECB President Mario Draghi said the latest stimulus measures are intended to “further ease financing conditions, stimulate new credit provision and thereby reinforce the momentum of the euro area’s economic recovery and accelerate the return of inflation to levels below, but close to, 2.0%.” With euro area inflation dropping to -0.2% in February from 0.3% in January, Draghi cautioned that the Governing Council will closely monitor price-setting behavior and wage developments to “ensure that the current low inflation environment does not become entrenched in second-round effects on wage and price-setting.” How these moves will affect the eurozone economy and the U.S. equity markets remains to be seen.

· The Treasury statement for February shows the federal deficit is at $192.6 billion. There was a surplus of $55 billion in January. The deficit for fiscal 2016 (October through February) sits at $353 billion. Compared to the first five months of fiscal 2015, receipts for fiscal year 2016 are up 5.3%, while outlays are up 1.86%.

· U.S. import prices (for goods bought in the United States but produced abroad) fell 0.3% in February following a 1.0% drop in January, according to the latest information from the U.S. Bureau of Labor Statistics. The February decrease was mostly led by declining fuel prices. The price index for exports of goods made in the United States and sold abroad decreased 0.4% in February, after falling 0.8% the previous month. Import prices actually gained 0.1% excluding food and fuels–the first positive reading since last May. Generally, falling import prices are a strike against rising inflation. Low oil prices and a strong dollar continue to keep prices of goods down for U.S. buyers.

· Claims for unemployment insurance and the insured unemployment rate are down. For the week ended March 5, there were 259,000 initial claims for unemployment insurance, a decrease of 18,000 from the prior week’s revised level of 277,000–the lowest level since last October. The advance seasonally adjusted insured unemployment rate dropped to 1.6% for the week ended February 27. Also for the same week, the advance number for
continuing unemployment insurance claims was 2,225,000, a decrease of 32,000 from the week ended February 20.

Japan: A Buy Low Opportunity?

March 10th, 2016

Lately, it seems as if no asset class, country nor business sector is safe from the bear market (a relative Teddy bear so far, but a bear nonetheless). As we wait for the turmoil to subside, we’re constantly evaluating where we think our clients’ assets are best positioned going forward. Lately, Japan has been of particular interest to us.

20+ years of economic purgatory

Soon after its real estate and stock market bubbles burst in 1989, Japan became caught in a deflationary spiral. While most major countries have seen their GDP’s expand over the past 20 years, Japan’s has actually contracted slightly over this period (see chart below).

[While some European GDP data is incomplete above, you can see how much more these countries’ GDPs grew compared to Japan.]

Japan’s declining GDP over the period can be explained in large part by persistent deflation. While most investors fear inflation, deflation is far more crippling because it discourages consumers from buying: Why purchase something now when it is likely to be cheaper in the future?

Not surprisingly, weak economic performance has led to poor earnings growth for Japanese companies, causing Japan’s equity market to actually decline over the past 20 years:

[EWJ = Japanese stocksSPY = US stocksEWC = Canadian stocksEWL = Swiss stocksEWG = German stocks]

:

Source: www.ycharts.com

Waking a sleeping giant

With the world focused on China (now the second largest economy after the US), we tend to forget that Japan is number three and was in second place as recently as 2010. But over the past two decades, while most developed and emerging economies (especially China) grew handsomely, Japan stagnated—its economy and stock market went nowhere.

Since 2001, the Bank of Japan (BOJ) has tried to stimulate the Japanese economy using quantitative easing and other measures, to limited success. In December 2012, Shinzo Abe became prime minister of Japan on a platform of economic reforms. “Abenomics” included quantitative easing on a scale never before seen in Japan or elsewhere, along with various fiscal measures. The ultimate goal is to bring an end to deflation and help the Land of the Rising Sun again live up to its name.

While it’s too soon to declare victory, Abenomics has finally produced some inflation in both prices and wages, dramatically weakened the Yen (important for a net exporter like Japan), and buoyed consumer spending. As a result, Japan is finally seeing some persistent growth in GDP, though still slow compared with other major countries.

Last month, the BOJ instituted negative interest rates, joining the ECB and a few other central banks. So long as the BOJ and the Abe government persist in their efforts, we think it’s likely that these policies will continue to increase Japanese consumer spending and bank lending. Moreover, there are many other reasons to be bullish on Japan, including one of the highest rates of R&D (research and development) spending as a percentage of GDP in the world[i], surging corporate profits and returns on equity, investor-friendly corporate reforms, rising dividends, and increased demand for stocks from both the Japanese public and institutions[ii]. Moreover, the combination of high productivity and a weak Yen makes Japan one of the most competitive locations for manufacturing in the world.

Don’t call it a comeback—yet

It’s still too early to say that Japan will again become an economic titan, but the events of the past three years suggest that the country’s economy is finally emerging from its economic purgatory. And with equity valuations the cheapest they have been in decades, we see a lot of upside here. We continue to modestly overweight Japan in our client portfolios, and are constantly looking for companies there that will benefit from the country’s recovering mojo.

Please let us know if you have any questions, comments or requests for future newsletters.

[i] https://en.wikipedia.org/wiki/List_of_countries_by_research_and_development_spending

[ii] https://www.blackrockblog.com/2016/01/07/case-for-investing-japan/

Dr. Ken Waltzer, MD, MPH, AIF®, CFA, CFP®

Managing Director, KCS Wealth Advisory

Laura Gilman, CFP®, PFP, MBA

Managing Director, KCS Wealth Advisory

Adam Bragman, CFA

Director of Investment Research, KCS Wealth Advisory

KCS Wealth Advisory is a registered investment adviser. Our services include discretionary management of individual and institutional investment accounts, along with personalized financial, estate and tax planning services.

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. 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. Past performance does not guarantee future results. Investing involves risk, including loss of principal. Consult your financial professional before making any investment decision. Other methods may produce different results, and the results for different periods may vary depending upon market conditions and portfolio composition. This email does not represent an offer to buy or sell securities.

Investment advisory services offered through KCS Wealth Advisory, an SEC Registered Investment Adviser.  Clearing, custody services and other brokerage services provided to clients of KCS Wealth Advisory are offered by Fidelity Brokerage Services LLC, Member NYSE/SIPC.  Fidelity and KCS Wealth Advisory are unaffiliated entities.  When securities are being offered, they are offered through Mutual Securities, Inc., Member FINRA/SIPC. Supervisory office located at 807-A Camarillo Springs Road, Camarillo, CA 93012. KCS Wealth Advisory is not affiliated with Mutual Securities, Inc.

Market Week: March 9, 2016

March 9th, 2016

The Markets

Equities continued to show life as each of the major indexes listed here posted gains over the prior week. Favorable reports from the employment and manufacturing sectors may be quelling investor fears of an imminent recession. For the week ended March 4, each of the indexes listed here advanced at least 2.20%, with the Russell 2000 and Global Dow leading the way with gains of 4.31% and 4.42%, respectively. With each weekly advance, the indexes are moving closer to their 2015 year-end values.

The price of crude oil (WTI) increased again last week, closing the week at $36.33 a barrel, $3.49 ahead of the prior week’s closing price. The price of gold (COMEX) gained by last week’s end, selling at $1,260.10 by late Friday afternoon, down from the prior week’s closing price of $1,222.80. The national average retail regular gasoline price increased for the second week in a row, selling at $1.783 per gallon on February 29, 2016, $0.053 over the prior week’s price but $0.690 under a year ago.

Market/Index

2015 Close

Prior Week

As of 3/4

Weekly Change

YTD Change

DJIA

17425.03

16639.97

17006.77

2.20%

-2.40%

Nasdaq

5007.41

4590.47

4717.02

2.76%

-5.80%

S&P 500

2043.94

1948.05

1999.99

2.67%

-2.15%

Russell 2000

1135.89

1037.18

1081.93

4.31%

-4.75%

Global Dow

2336.45

2164.45

2260.08

4.42%

-3.27%

Fed. Funds rate target

0.25%-0.50%

0.25%-0.50%

0.25%-0.50%

0 bps

0 bps

10-year Treasuries

2.26%

1.76%

1.87%

11 bps

-39 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Headlines

· The news from the employment sector continues to be favorable based on the latest report from the Bureau of Labor Statistics. Total nonfarm payroll employment increased by 242,000 in February, while the unemployment rate was unchanged at 4.9%. The number of unemployed persons, at 7.8 million, was unchanged from the prior month. For 2016, the unemployment rate and the number of unemployed persons were down by 0.6 percentage point and 831,000, respectively. A negative item from the report shows average hourly earnings for all employees on private nonfarm payrolls declined by $0.03 to $25.35 in February, following an increase of $0.12 in January. Nevertheless, average hourly earnings have risen by 2.2% over the year.

· January was far from robust when it came to international trade, as exports were down 2.1% and imports fell 1.3% leading to a goods and services trade deficit of $45.7 billion–up $1.0 billion from December. According to the Census Bureau, the January increase in the goods and services deficit reflected an increase in the goods deficit of $1.1 billion to $63.7 billion and an increase in the services surplus of $0.1 billion to $18.0 billion. Year-over-year, the goods and services deficit increased $2.1 billion, or 4.8%, from January 2015. Once again, a strong dollar and relatively low oil prices have impacted the U.S. trade deficit.

· The Bureau of Labor Statistics released its report on productivity and costs for the fourth quarter of 2015. Labor productivity, which is the measure of the production of goods and services per hour of labor, decreased at a 2.2% annual rate during the fourth quarter. While output increased 1.0%, hours worked increased 3.2%. Unit labor costs in the nonfarm business sector increased 3.3% in the fourth quarter of 2015, reflecting a 1.1% increase in hourly compensation and a 2.2% decrease in productivity. Nevertheless, from the fourth quarter of 2014 to the fourth quarter of 2015, productivity increased 0.5%.

· Favorable news came from the manufacturing sector as new orders for manufactured goods increased $7.5 billion, or 1.6%, to $463.9 billion in January, according to the latest report from the Census Bureau. This increase followed two consecutive months of decreases. Shipments of manufactured goods rose for the first time in seven months, jumping $1.4 billion, or 0.3%, in January.

· The Purchasing Managers’ Manufacturing Index (PMI) is based on a survey of purchasing managers from several companies in an attempt to get a read on the manufacturing sector of the economy. The Markit U.S. Manufacturing Purchasing Managers’ Index™ fell from 52.4 in January to 51.3 in February, marking the second lowest reading since October 2012. A slowdown in manufacturing output and new business growth contributed to the receding index.

· The Institute for Supply Management (ISM) also produces a PMI, which contracted in February for the fifth consecutive month. The February ISM PMI® registered 49.5%, an increase of 1.3 percentage points from the January reading of 48.2%. A reading of less than 50.0% is indicative of contraction, so while February’s PMI is slightly ahead of January’s reading, the manufacturing sector is contracting nonetheless, but at a slower pace when compared with January. The last time the ISM Manufacturing Index was at least 50% was September 2015.

· The Non-Manufacturing Index from the Institute for Supply Management indicates growth in February at 53.4%. Similar to the PMI, a reading above 50.0% indicates growth. The index for January was 53.5%. Thus, February’s index reading reflects growth, but at a slower rate. The indexes for business activity and new orders each showed growth in February, while the Employment Index decreased 2.4 percentage points to 49.7% from the January reading of 52.1%. The non-manufacturing sector includes industries such as services, construction, mining, and agriculture.

· The National Association of Realtors® Pending Home Sales Index fell 2.5% in January to 106.0, compared with December’s index of 108.7. The index is still 1.4% higher than the index from a year earlier. Lawrence Yun, chief economist for the NAR, cited several possible reasons for the January pullback, including a winter blizzard in the Northeast, an increase in home prices, and minimal inventory of homes available for sale.

· According to the latest figures from the Census Bureau, construction spending during January came in at a seasonally adjusted annual rate of $1,140.8 billion, 1.5% above the revised December estimate of $1,123.5 billion and 10.4% ahead of January 2015. Residential construction remained at about the same level in January as the prior month, while nonresidential construction increased 1.0% above December’s revised estimate. Public construction made a significant jump of 4.5% ahead of December’s revised estimate.

· For the week ended February 27, there were 278,000 initial claims for unemployment insurance, an increase of 6,000 from the prior week’s unrevised level of 272,000. The advance seasonally adjusted insured unemployment rate remained at 1.7% for the week ended February 20. Also for the same week, the advance number for continuing unemployment insurance claims was 2,257,000, an increase of 3,000 from the week ended February 13.

Data sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct
investment.

Market Week: March 2, 2016

March 2nd, 2016

The Markets

Last week saw a mixed bag of information from some major economic sectors, which may have influenced the equities markets to record some marginal gains by week’s end. Each of the indexes listed here posted week-on-week gains, led by the Russell 2000 and Nasdaq. The Dow and S&P 500 posted gains of about 1.5%, respectively, while the Global Dow inched ahead despite Saudi Arabia’s oil minister saying he did not foresee cuts in the supply of oil, likely adding to the glut of global supply.

The price of crude oil (WTI) increased again last week, closing the week at $32.84 a barrel, $3.01 ahead of the prior week’s closing price. The price of gold (COMEX) fell by last week’s end, selling at $1,222.80 by late Friday afternoon, down from the prior week’s closing price of $1,228.00. The national average retail regular gasoline price actually increased for the first time in eight weeks, selling at $1.730 per gallon on February 22, 2016, a mere $0.006 above the prior week’s price of $1.724 but still $0.602 under a year ago.

Market/Index

2015 Close

Prior Week

As of 2/26

Weekly Change

YTD Change

DJIA

17425.03

16391.99

16639.97

1.51%

-4.51%

Nasdaq

5007.41

4504.43

4590.47

1.91%

-8.33%

S&P 500

2043.94

1917.78

1948.05

1.58%

-4.69%

Russell 2000

1135.89

1010.01

1037.18

2.69%

-8.69%

Global Dow

2336.45

2149.19

2164.45

0.71%

-7.36%

Fed. Funds rate target

0.25%-0.50%

0.25%-0.50%

0.25%-0.50%

0 bps

0 bps

10-year Treasuries

2.26%

1.75%

1.76%

1 bps

-50 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Headlines

· The “second” estimate of the gross domestic product was a little better than the first as the GDP advanced 1.0%, which is 0.3 percentage point above the initial fourth quarter estimate. The GDP, which is the broadest measure of economic activity in the United States, increased 2.0% in the third quarter and 3.9% in the second. The increase in real GDP in the fourth quarter reflected positive contributions from personal consumption expenditures (PCE), residential fixed investment, and federal government spending, gains that were partly offset by negative contributions from exports, nonresidential fixed investment, state and local government spending, and private inventory investment. Essentially, the fourth quarter deceleration in the GDP reflects weaker consumer spending. However, this trend may be changing as evidenced by January’s income and outlays report that follows.

· According to the latest report from the Bureau of Economic Analysis, consumers increased spending in January, as personal spending increased 0.5% from December. An indicator of inflationary trends relied upon by the Fed, core personal consumption expenditures (excluding volatile food and energy costs) gained 0.3% in January and is 1.7% ahead of the same period last year as it inches toward the Fed’s inflation target of 2.0%. Both
personal income (pretax earnings) and disposable personal income (less taxes) increased 0.5%. Wages and salaries increased $48.1 billion in January, compared with an increase of $18.3 billion in December. Personal saving remained relatively unchanged at $705.1 billion in January, compared with $709.2 billion in December.

· Existing home sales increased 0.4% in January to a seasonally adjusted annualized rate of 5.47 million–the highest annual rate in six months. The median sales price of existing homes fell from $223,200 in December to $213,800 in January, but it is still up 8.2% from January 2015, according to the National Association of Realtors®. While total housing inventory is 2.2% lower than a year ago, January saw inventory increase 3.4% over the prior month.

· In another sign that the real estate sector is slowing a bit, sales of new single-family homes sunk 9.2% in January compared with the prior month. January’s 494,000 sales figure is 50,000 off December’s revised total, and 5.2% below the January 2015 estimate of 521,000. The median sales price of new houses sold in January was $278,800, while the average sales price was $365,700. The seasonally adjusted estimate of new houses for sale at the end of January was 238,000. This represents a supply of 5.8 months at the current sales rate.

· The Census Bureau’s advance report on orders for manufactured durable goods (expected to last at least three years) shows new orders increased $11.1 billion, or 4.9%, to $237.5 billion in January following two consecutive months of declines. Excluding transportation (up $8.2 billion, or 11.5%), new orders increased 1.8%. Excluding defense, new orders increased 4.5%. Shipments of manufactured durable goods in January, up two of the last three months, increased $4.6 billion, or 1.9%, to $241.9 billion. Inventories of manufactured durable goods in January, down six of the last seven months, decreased $0.4 billion, or 0.1%, to $396.3 billion. This report signals an investment by business in goods and equipment–a welcome sign for the manufacturing sector of the economy.

· The advance report on the trade deficit in goods for January shows the trade gap widening to $62.2 billion, compared with $61.5 billion in December. Both exports (2.9%) and imports (1.5%) decreased for the month.

· The Conference Board Consumer Confidence Index®, which had increased moderately in January, declined in February. The index now stands at 92.2, down from 97.8 in January. The index was reflective of surveyed consumers’ weakened assessment of current business conditions, apprehension about their personal financial situations, and, to a lesser degree, labor market prospects. Following suit, the University of Michigan’s Index
of Consumer Sentiment dropped 0.3 percentage point in February to 91.7, compared with 92.0 in January.

· For the week ended February 20, there were 272,000 initial claims for unemployment insurance, an increase of 10,000 from the prior week’s unrevised level of 262,000. For the week ended February 13, the advance number for continuing unemployment insurance claims was 2,253,000, a decrease of 19,000 from the previous week’s revised level. The advance seasonally adjusted insured unemployment rate remained at 1.7% for the week ended February 13.

Eye on the Week Ahead

Important economic information available this week centers on two sectors that have not been particularly favorable of late: manufacturing and international trade. On the other hand, the Bureau of Labor Statistics releases its latest figures on the employment situation, which has been one of the few economic bright spots over the last several months.

Data sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.