Market Notes June 24, 2011

The stock market continues to be controlled by events in Europe. While better than expected economic news was released today for the U.S. in the form of increased orders for durable goods (refrigerators, cars, airplanes, mobile phones etc.), it was not enough to counter growing concerns surrounding the European debt crisis. The increase in durable goods orders shows that the factory sector of the economy is continuing to expand.

In addition to the fears surrounding a potential default by Greece, rumors of problems within the Italian banking system added downward pressure to the equity markets globally.

For today, all of the focus remains on Europe. Fidelity Investment’s Jurrien Timmer summed up the situation by saying, “Europe is only a few good decisions away from a long-term resolution, and only a few bad decisions away from failure.” Ultimately, though there may be more turmoil to come, the price of failure is high and this should be a substantial motivation to develop a solution.

Lowe Wealth Advisors will be watching closely on Tuesday as the Greek parliament is set to vote on the new austerity measures. Should they pass, the equity markets could use the news as a catalyst for potential recovery (this is not predictive of future market performance).

Though we have very little foreign exposure in our actively managed portfolios, we continue to focus on China. Many analysts believe that China had a large part in pulling the global economy out of recession in 2008. In our opinion, they were the primary driver of the rise in commodity prices.

Now, some warning signs may be developing in their economy. The Chinese housing market could be peaking and on the cusp of a decline. Additionally, the recent rise of the Chinese consumer has been a benefit for the global economy. However, the rise of the Chinese consumer is also leading to wage inflation. China will not always be the source of cheap labor that is has been and this will undoubtedly impact the global economy in the future.

Lowe Wealth Advisors may utilize any decline in China as an opportunity to add asset exposure in certain areas as appropriate.

Next week, Lowe Wealth Advisors plans to provide insight and commentary regarding the U.S. Treasury Debt Limit and potential implications for financial markets. Watch for a piece on this topic by the middle of the week. Until then, we hope you have an enjoyable weekend.

Client Service Agreements

By now most of our clients should have received an updated Client Service Agreement. Thank you to those who have returned them already and thank you to those of you are will be sending them back this week. It is very important for Lowe Wealth Advisors to receive the agreements by June 30. Should you have any questions please email or call us.

We want to note a typo on the exhibit of the Schedule of Assets. This should read assets.

Please note: Harold Lowe has a new email address. It is All other Lowe Wealth Advisors email addresses remain unchanged. Please update your address books to ensure future delivery of emails to Harold.

This commentary is intended for the dissemination of general information regarding market conditions to Lowe Wealth Advisors clients. The information contained herein should not be construed as personalized investment advice. Past performance is no guarantee of future results, and there is no guarantee that the views and opinions expressed in this report will come to pass. While any general market information and statistical data contained herein are based on sources believed to be reliable, we do not represent that it is accurate and should not be relied on as such or be the basis for an investment decision. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Individual client needs, asset allocations, and investment strategies differ based on a variety of factors. Any opinions expressed are current only as of the time made and are subject to change without notice.

Important Disclosures

  • Not all portfolios are actively managed. If you have a question about how your account is being managed please contact us.
  • No diversification can completely protect against market risk or other risk factors with investing. A diversified portfolio could still lose money.
  • An Index is a portfolio of specific securities (common examples are S&P, DJIA, NASDAQ), the performance of which is often used as a benchmark in judging the relative performance of certain asset classes. Indexes are unmanaged portfolios and investors cannot invest directly in an index. Past performance is not indicative of future results.

Foreign investing carries additional risk such as currency risk, political risk and different accounting standards.

*Lowe Wealth Advisors is a registered investment advisor.