“Significant” shattered any remaining confidence
The Federal Reserve Chairman said the U.S. economy faced “significant” risks and that seemingly crushed any remaining confidence in the market for the remainder of the week. The Dow Jones Industrial Average turned in its worst weekly performance since October 2008. No one seems to have any confidence in leaders, GLOBALLY, to come up with any good solutions to the very obvious problems.
All of the indices we follow were big losers for the week, although Friday ended up being a modestly positive trading day. The Dow Jones Industrial Average (DJIA) lost -6.41% to finish at 10,771, the Standard & Poor’s 500 Index (S&P 500) lost -6.53% to finish at 1,136 and the Nasdaq Composite Index lost -5.30% to finish at 2,483. The Russell 2000 Index, which tracks the performance of small capitalization stocks, lost -8.66% to finish at 652.
Our favorite economist, Ed Hyman, wrote today that his research shop is reducing their real Gross Domestic Product forecasts down from +2% to +1% for the final quarter of 2011 and the first half of 2012. The change is because Eurozone bank stocks have continued to plunge, Obama and Congress seem to be at an impasse until the 2012 election, and policy responses outside of the U.S. have continued to undermine investor confidence around the world. However, Hyman also writes that “cooling commodity prices could cool [inflation] around the world, leading to a wave of central bank easing from ECB to China to Brazil.”
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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly. Stock investing involves risk including loss of principal. The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries, and widely held by individuals and institutional investors. The Standard & Poor’s 500 Stock Index (S&P 500) is an unmanaged capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The NASDAQ Composite Index measures all domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index. The Russell 2000 Small Stock Index is an unmanaged index generally representative of the 2000 smallest companies in the Russell 3000 Index. The Russell 2000 is an unmanaged index generally comprised of companies with lower price-to-book ratios and lower forecasted growth values.
David B. Armstrong, CFA
President & Co-Founder
Dave got into the industry when he discovered his passion for finance in his mid-20’s. He’s a combat veteran and served as an officer in the United States Marines Corps on both active duty and in the reserves, retiring at the rank of Lieutenant Colonel. While serving on active duty, Dave was unable to spend money on deployments, so he became a self-taught investor. Along with a few bucks cash as a bouncer, his investing performance grew to be good....
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