Market Notes September 21, 2012

The jobs numbers released yesterday morning, although slightly better than last week, reflected ongoing economic weakness and poor prospects for a strong recovery in the short-term. Unemployment claims remain at a four-week average of 377,750 (Source: WSJ Online); we are experiencing the highest levels since June.

One of the goals of the recent QE3 Fed action was to kindle the recovery so that new jobs would be generated. Even if it is effective, the impact will not be felt immediately, so today’s unemployment data is really not surprising. One cannot consider that today’s jobs report is an indicator that the QE3 has not had the desired short-term result.

Increasing layoffs, such as the announcement that the Bank of American (BofA) will seek to reduce 16,000 jobs by the end of 2012, demonstrate the hurdles that the jobs reports are facing.

The recent early earnings report by FedEx also signals that companies may be anticipating further slowing in consumer spending, thereby potentially putting pressure on corporate profits in 2013. Should additional pressure be placed on corporate profits, other companies could mimic BofA’s action to further trim employee numbers or possibly put the brakes on hiring new employees.

Lowe Wealth Advisors sees the resolution of the Fiscal Cliff and the presidential election outcome as the potential definitive drivers of the markets. Our belief remains that the Fiscal Cliff will find a short-term resolution and that a recession is not likely in 2013. Should our conviction change relative to either of these issues a significant portfolio restructure may become necessary.

For now, we would not be surprised to see a continuation of market volatility.

Based on the Fed’s recent actions, as well as our overall view of the markets, we have fine tuned many allocations by reducing certain types of bonds, adding exposure to the home builder sector, and adding exposure to gold mining companies (in addition to our core gold holding). (Note: Commodity and concentrated sectors may be volatile and should only be considered as part of a total portfolio strategy when carefully evaluated by an investment professional. You should not execute any trading strategies on your own and this is not a recommendation to purchase or sell any security.)

Especially given the current economic climate and ongoing uncertainty, you will not want to miss the Lowe Wealth Advisors -hosted WebEx and Conference Call program on October 2nd at 4 PM, which will cover the Fiscal Cliff and November’s election. If you’ve not yet registered, please be sure to do so ASAP. For additional information on this unique opportunity please see the details below.

Lowe Wealth Advisors is pleased to offer you an opportunity to interact directly with the Fidelity Investments’ Government Relations Team on October 2, 2012 at 4:00 PM (Eastern Time). Over the years Lowe Wealth Advisors has gained insight into the impact politics has on our economy through our interface with this branch of Fidelity Investments. We have found their presentations to be valuable and have requested the same opportunity for our clients.

Lowe Wealth Advisors will host this conference call/webinar in order to provide additional perspective on the issues surrounding the Fiscal Cliff, as well as the upcoming election. Shahira Knight, vice president of Government Relations for Fidelity Investments, will conduct the thirty minute presentation, which will be followed by a Question & Answer session.
We expect that you will gain an understanding of the following:

  • The issues we are facing.
  • Why we are seeing so much gridlock in Washington.
  • What to watch for as we move into November.
  • Why we are concerned about the Fiscal Cliff and possible resolutions.

Whether you are deeply interested in Washington’s politics, or simply concerned with the activities of our federal government, we believe that you will find the October 2nd program valuable and insightful.

To RSVP for the 4:00 PM (Eastern Time) October 2nd event, please call Shazelle at 443-766-7160 or email a reply to

Lowe Wealth Advisors is an SEC registered investment adviser with its principal place of business in the State of Maryland. Lowe Wealth Advisors and its representatives are in compliance with the current notice filing and registration requirements imposed upon registered investment advisers by those states in which Lowe Wealth Advisors maintain clients. Lowe Wealth Advisors may only transact business in those states in which it is registered, or qualifies for an exemption or exclusion from registration requirements. For information pertaining to the registration status of Lowe Wealth Advisors, please contact Lowe Wealth Advisors, or refer to the Investment Adviser Public Disclosure web site (

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. 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.