Weekly Market Review

03/03/08

 
The US stock market struggled in February as the S&P 500 dropped 3.3% (total return) for the month.  It was the 4th consecutive down month for the index, the first time that has happened since July 2002.  Nervous stock investors may be selling stocks and buying bonds, pushing up the price of the 10-year Treasury note and driving down its yield to 3.51% on Friday, a drop of ˝ of 1% YTD (source: BTN Research).   
 
Before last week, the euro had never traded for as much as $1.50 (i.e., strong euro, weak dollar).  That currency threshold was penetrated when the euro reached $1.5240 on Friday.  Many economists are nervous about the near-term inflation prospects for our country since a strong euro theoretically drives up the price of many foreign imports being sold to US consumers.  Americans bought an average of $194 billion of foreign imports per month in 2007 (source: Commerce Department).   
 
Former Fed Chairman Alan Greenspan turns 82 years old on Thursday.  Greenspan, who ran the Fed for 18 ˝ years through January 2006, graduated from NYU 60 years ago with an economics degree.  Tomorrow may rank as “Super Tuesday # 2” as critical primaries are held in Ohio and Texas.  The ultimate winner of the presidential election has won the state of Ohio in each of the last 11 November votes, including 7 Republican and 4 Democratic winners (source: Federal Reserve, Ohio Politics).
 
Notable Numbers for the Week:
 
1.        UP, DOWN AND BACK AGAIN - In the 9 bear markets since 1957 (defined as a S&P 500 tumble of at least 20%), each of which have eventually recovered and closed above the previous bull market high, the average length of time of the decline (i.e., from peak to bottom) was 12 months and the average length of time to bounce-back and close at a new record high (i.e., from bottom to a new peak) is 23 months (source: BTN Research). 
 
2.        WON’T BE AS GOOD - Only 47% of working Americans believe their children will ultimately enjoy a better retirement than they will experience themselves (source: AXA Equitable Retirement Scope).  
 
3.        I’LL STAY AROUND - 34% of American retirees expect to live until at least age 90 (source: American Association of Retired People). 
 
4.        MORE IN THAN OUT . . . FOR NOW - Social Security took in $179 billion more than it paid out in calendar year 2007.  The last time Social Security ran a deficit in any calendar year was 1983 (source: Social Security Administration).

 

 

 

 

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