The economy continues to give us mixed signals. Here is a succinct list of what happened last week:

Positives
1) Ireland getting bank bailout, fire put out for now
2) China, Hong Kong and South Korea all take steps to battle rising inflation
3) Philly Fed report on economic activity much better than expected and at best level since Dec ’09
4) Initial Unemployment Claims fall below 440k for 2nd straight week
5) US Retail Sales show upside surprise
6) Germany Nov ZEW (indicator of economic sentiment) unexpectedly rises
7) From contrarian view, bulls in AAII (American Assn of Individual Investors) fall to 40 from 57.6 which was highest since Jan ’07

Negatives
1) China, Hong Kong and South Korea all take steps to slow things down
2) Multi-family housing “starts” to fall sharply
3) NY report on manufacturing activity much weaker than expected (but 6 mo outlook rises)
4) Interest rates move higher, average 30 yr mortgage rate at 2 mo high
5) Mortgage Refi’s fall 17%, purchases down 5%
6) Municipal bonds come under pressure

President Franklin D. Roosevelt set Thanksgiving as the Thursday before last of November as Thanksgiving Day in the year 1939.  His critics claimed he did so to make the Christmas shopping season longer and stimulate the economy.

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“Winning is not everything, but the effort to win is.”

Zig Ziglar

The show airs on WDIY Wednesday evenings, from 6-7 p.m. The show is hosted by Valley National’s Laurie Siebert CPA, CFP®. This week “Your Financial Choices, 6 to 7 pm: Host Laurie Siebert, CPA, CFP(r) brings you highlights of some of her favorite shows over the past year in this pre-recorded show. If you have questions, visit the show’s website www.yourfinancialchoices.com . WDIY is broadcast on FM 88.1 for reception in most of the Lehigh Valley; and, it is broadcast on FM 93.9 in the Easton/Phillipsburg area; and, it is broadcast on FM 93.7 in the Fogelsville/Macungie area – or listen to it online from anywhere on the internet. For more information, including how to listen to the show online, check the show’s website www.yourfinancialchoices.com  and visit www.wdiy.org .

My Steelers are getting a bad rap. The NFL referees are unfairly penalizing them. Several of the Steelers defensive players have developed a reputation for causing fumbles and making big hits (and, unfortunately, injuries). The NFL Commissioner has held individual meetings with several Steelers players to instruct them on play. But, the referees seem to have misapplied these points. Now, the referees are penalizing these players plus several other Steelers players for clean hits; and, I think a lot of these calls go back to the Commissioner’s involvement. This week the Steelers were called on 18 penalties of which 14 were accepted by the Oakland Raiders. The Steelers still won even with the lopsided penalties. But, the outcome might be different if the Steelers were playing a high quality opponent. The Steelers’ GM or Coach needs to call the Commissioner’s office to seek fair play among the referees.

THE MARKET’S BIGGEST WINNER last week just might have been General Motors, if only because the auto maker finally made it back to Wall Street after a searing trip through bankruptcy court. GM (ticker: GM), which parked a Camaro in front of the New York Stock Exchange to herald its return, priced 475 million common shares at $33 apiece. The stock opened above 35 but ended the week at 34.26, endowing the new GM with a market value of more than $50 billion. The government was a lesser winner, pocketing only about $14 billion of the $49.5 billion it had ponied up last year to save the struggling company.

Including GM, new stock issues and secondary offerings totaled $24.6 billion last week, the second-heaviest week for stock issuance since Dec. 18, 2009. While a more receptive market is a good sign for investors, JPMorgan says the fresh supply of stock likely weighed on the market, especially as actively managed U.S. investment accounts have seen $1.6 billion of outflows in the past four weeks.

As for the broad market, there was lots of activity but little change in prices. The Dow Jones Industrial Average closed up just 0.1%, to 11,203.55 for the five trading sessions, after tumbling about 1.6% Tuesday and regaining the same percentage Thursday. The Nasdaq Composite rose 0.7% at 2518.12.

“It was a weird week,” says Michael Purves, chief equity strategist and head of derivatives research at BGC Financial in New York. “Thursday was a test, arguably a trap for bulls who may regret it next week. There may be forces of continued selling into any rally. Investors want to lock in gains if they are up for the year and reconnoiter after things settle down.”

Thomas J. Lee, equity strategist at JPMorgan, says the week that just past amounted to a “healthy but harrowing” pause. Lee thinks economic data is showing strong cyclical momentum, from jobless claims of 439,000 reported last week, in line with expectations, to retail sales rising 0.4% in October (excluding autos and gas), double the Street’s forecast.

THE WORLD’S POLICY MAKERS NO LONGER are pulling their oars in the same direction. The market’s mid-week setback owed in part to fears of a looming sovereign-debt crisis in Ireland and talk of China’s plans to tighten credit, even as the Federal Reserve is adding to the U.S. money supply. The Fed even stole a minute from all its quantitative easing to order a second round of bank stress tests early next year, just to prove that the nation’s largest bank-holding companies can withstand “adverse economic conditions.”

Investors didn’t take the news well; the Keefe, Bruyette & Woods bank-stock index slumped 2.3% on the week.

For good measure, the Federal Deposit Insurance Corporation highlighted 50 criminal investigations into former bank employees. And two more of associates of Bernard Madoff were arrested (Source: Barrons Online).

U.S. Stocks, Foreign Stocks, and Bonds were little changed last week.  During the last 12 months, U.S. STOCKS outperformed BONDS.



Source: Morningstar Workstation. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. Three, five and ten year returns are annualized. Assumes dividends are not reinvested.

The economy continues to give us mixed signals. Here is a succinct list of what happened last week:

Positives
1) University of Michigan confidence rises to 5 month high
2) Initial Jobless Claims “4 week average” falls to lowest since Sept ’08
3) NFIB small business optimism index rises almost 3 pts to best since May
4) Wholesale Inventories jump more than expected, good for GDP
5) Global criticism of Fed’s Quantitative Easy II

Negatives
1) Consumer 1 yr inflation expectations rise to 3%, most since June
2) 30 yr bond auction very weak, yield rises to 5 month high, 10 yr yield at two month high, average 30 yr mortgage rate rises to one month high.
3) Chinese stocks slammed on inflation and rate hike fears
4) Interest rates on PIG (Portugal, Ireland, Greece) jump. Spain and Italy also see rise in yields, pressure for Ireland to tap EFSF grows
5) Wholesale Inventories rising, unwanted inventory?
6) Cisco’s earnings report disappoints Wall Street- company specific or not?