Market in a Minute; September 14, 2009

Presented by Alan Favre, CFP

Authored by Partick Adams, CFA

Index Price Last Week YTD The Investor Intelligence Sentiment Index is now above 50% bulls and below 20% bears. This index is a good intermediate-term indicator for the market. When there are too many bulls, it is time to sell, and when there too many bears it is time to buy. The indicator is clearly at a sell reading. Our valuation work indicates the market is fully valued as well. The market is up over 54% from the low, there has only been one other period in time when we had a better six month advance, and that was in 1933. Could the market still go higher…sure, but it really cannot go up much more, in a reasonable time period, without a major shift in fundamentals. The near term fundamentals all look fine, but when you go out a quarter or two you have greater uncertainty.

High unemployment and too much consumer debt do not correlate with a new bull market. The market is now at another overbought condition and we are in a seasonally very weak period for the market historically. It all seems too obvious that the market is going to correct…

Last week National Semiconductor announced very strong earnings and Texas Instruments preannounced a positive earnings surprise, but both stocks traded down. This is an indication that the near term good news may be priced into the market.

There is a lot of economic data out this week. We are watching closely the Retail Sales excluding autos. Last month it was stronger than we expected.

Dow Jones 30 9605 2.8% 9.4%
S&P 500 1043 3.9% 15.4%
NASDAQ 2081 4.9% 32.0%
Russell 2000 594 4.0% 18.8%
Russell 2000 Growth 1965 5.4% 25.9%
Russell 2000 Value 3009 5.7% 12.5%
Russell 1000 Growth 459 2.4% 23.7%
Russell 1000 Value 539 3.1% 10.6%

Source: Baseline, Returns are appreciation only.

S&P Sector Performance
Index Price Last Week YTD

Information Technology 331 4.5% 42.7%
Consumer Disc. 213 4.6% 25.6%
Consumer Staples 260 2.4% 5.3%
Health Care 334 2.5% 8.0%
Financials 195 3.0% 15.6%
Industrials 229 6.3% 10.6%
Energy 407 5.9% 5.4%
Telecommunications 108 5.3% -3.6%
Utilities 146 0.0% -1.6%
Materials 185 4.0% 34.1%

Source: Baseline, Returns are appreciation only.

Interest Rates
Fed Fund 0.25 5-Year 2.36
3-Month 0.13 10-Year 3.42
6-Month 0.20 30-Year 4.23
2-Year 0.92

Source: Bloomberg.com

Economic Events This Week
Date Event Forecast Previous

15-Sep Core PPI 0.1% -0.1%
15-Sep PPI 0.8% -0.9%
15-Sep Retail Sales 2.0 -0.1%
15-Sep Retail Sales ex-auto 0.4% -0.6%
15-Sep Core CPI 0.1% 0.1%
15-Sep CPI 0.3% 0.0%
16-Sep Capacity Utilization 69.1% 68.5%
17-Sep Building Permits 596K 564K
17-Sep Housing Starts 580K 581K
17-Sep Initial Claims 555K 550K
17-Sep Philadelphia Fed 8.0 4.2

Source: Briefing.com

Economic Events Last Week
Date Event

10-Sep Initial claims for the week of 9/5 were 550K vs. estimates of 560K
11-Sep The Michigan Sentiment for Sep was 70.2 vs. forecasts of 67.5
11-Sep Wholesale inventories were -1.4% vs. expectations of -1.0%

Source: Briefing.com

J. Alan Favre, CFP
Managing Member
PEAK Wealth Management LLC
4600 S. Syracuse Suite 250
Denver, CO. 80237
Office: (303) 331-0123 ext. 100
Cell: (303) 907-3110
Fax: (303) 221-0950
Email: alanf@peakglobal.com
WebSite: http://www.peakglobal.com/