Weekly Newsletter 11/10/2014

Global markets ended last week mostly mixed on a mild week of economic data releases. The most notable releases from the U.S. were from the Institute of Supply Management (ISM). ISM releases monthly data in the form of indexes regarding manufacturing and non-manufacturing businesses. ISM surveys businesses about items such as inventories, hiring, new orders, sales and more. The latest ISM Manufacturing Report showed a move up from a reading of 56.6 to 59. Many of the underlying conditions moved up but the one number that no one wants to see rising, Backlog of Orders, did make a substantial jump from a reading of 47 to 53.

Overseas, there was little in terms of meaningful economic data releases other than the European Central Bank’s (ECB) interest rate decision. The ECB will continue to maintain its low interest rate policy and negative deposit rate for participating banks. In addition, ECB chief, Mario Draghi, reminded everyone that the ECB will soon be starting its purchase of asset-backed securities.

We continue to be cautiously optimistic on global markets and still see the US as the most stable investing market currently. Therefore, we are taking on little direct foreign investment risk. The recent global economic outlook from the International Monetary Fund showed a decline in growth prospects which supports our view that growth in the global economy has stalled. Accordingly, investors should expect the rate of change in equity investments is likely to slow (not stop) from the pace of the last few years. With this in mind, we actively seek quality of investment at this point.

Global Market Index Performance

Market Index 11-10

Getting Technical with Market Charts

In this section we present charts of the S&P 500 Stock Index and the US Bond Market Index relative to their 50 day (blue line) and 200 day (red line) moving averages.  In addition, we have added the blue shaded area which represents the recent trading channel. The 50 and 200 day moving averages are widely followed market trend indicators that provide a general picture of the health of the broad indexes.

Chart 1 – S&P 500 Index

$SPX 11-10

Chart 2 – US Aggregate Bond Index

$AKG 11-10

Global Data Points

Econ Data 11-10

Securities are offered through First Allied Securities, Inc. (FASI), a registered Broker Dealer, Member FINRA/SIPC. Advisory Services offered through Lighthouse Financial Advisors, Inc., a Registered Investment Advisor dba Lighthouse Wealth Management (LWM). Lighthouse Financial Advisors, Inc. is not a subsidiary or control affiliate of FASI.

Disclaimer – Information contained herein is taken from sources believed to be reliable, but cannot be guaranteed as to its accuracy. Market opinions contained herein are intended as general observations and are not intended as specific investment advice. The Standard and Poors 500 Index is an unmanaged group of securities considered to be representative of the stock market in general. The Barclays Aggregate Bond Index represents securities that are SEC-registered, taxable, and dollar denominated. The index covers the U.S. investment-grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. Contact your investment professional to discuss suitability for your particular circumstances. This article does not constitute an offer of sales of any securities. Securities trading is speculative and involves the potential loss of investment. Past results are not necessarily indicative of future results. Lighthouse Financial Advisors, Inc., dba Lighthouse Wealth Management, is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered, excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the advisor has attained a particular level of skill or ability.

About Katy Chase

Katy Chase, MBA, contributes her own perspective to the team. With previous training in Marketing and French, her perspective offers a mixture of macroeconomic, cultural, and client-focused experiences. In addition, Katy is a baker (with a specialty in chocolate), athlete, perpetual student/learner, volunteer, blogger, Nittany Lion, daughter, grand-daughter, sister, and wife.