It's only a matter of time!

Quote of the Week:
"Healing is a matter of time, but it is sometimes also a matter of opportunity - Hippocrates Greek Physician (460 BC - 377 BC)

On a sunny day in September of 1965, my dad took me to see the Dallas Cowboys play the Cleveland Browns at the old Cotton Bowl stadium. As we were sitting down, play was already underway. He said, "Look down there, Son. I want you to always remember you saw Jim Brown play football. He'll make a touchdown. It's only a matter of time".

It was, and do I ever remember that day, Mr. Brown and his Browns beat up on my Cowboys 24-17 (I looked it up) en route to a first place finish in the division that season. I was 9. Jim Brown was in his last of only 9 professional seasons before retiring. His 12,312 career rushing record, thought unbreakable, lasted some 19 years. Alas, it was only a matter of time until it was broken.

The current career rushing record holder, retired Dallas Cowboy Emmitt Smith, can surely expect the same treatment. It's only a matter of time.

Sports, including football, often mirror the business cycle, and by extension, the markets. For example, as we look over the remarkable week of market activity below, we are reminded that every market low to date has been followed by a record high. Yes, in time, every record gets broken.

Currently, a large amount of economic data continues its plodding improvement. In the last quarter, U.S. companies continued to stack up profits. In our view, markets seem to be healing.

Though we think it's only a matter of time, it is also a matter of opportunity, just as Hippocrates once said. Headwinds of debt, international unrest, and domestic politics will continue to push back, perhaps significantly for awhile.

It's only a matter of time, and we are perhaps closer than it seems. We'll see.**



Market Week: November 14, 2011

The Markets

Once again, European politics drove the movement of equities markets. Once leadership changes in Greece and Italy seemed imminent, equities recovered some momentum. The S&P 500 managed to turn positive for the year, while the Dow continued to be the year-to-date leader. Even the Global Dow saw some benefit from the political shifts, while the yield on 10-year Treasuries remained relatively stable.


Last Week's Headlines

• Faced with pressure from Greece's eurozone colleagues, Prime Minister George Papandreou resigned. He was replaced by former European Central Bank Vice President Lucas Papademos, who will lead a provisional coalition government in trying to adopt legislation that would meet the conditions needed to receive ongoing financial assistance.
• After the yield on 10-year Italian bonds spiked briefly well above 7%, the Italian Parliament passed austerity measures designed to keep investors from shunning the debt of the region's third-largest economy. As part of the deal, Italian Prime Minister Silvio Berlusconi resigned and former European Union Commissioner Mario Monti was asked to take over and lead a coalition "technocrat" government in implementing the reforms.
• Mortgage foreclosures, which had been delayed last year by processing problems, are on the rise again. The number of foreclosures was up 7% for the month of October; according to RealtyTrac, that's a seven-month high. However, the foreclosure rate was still almost a third less than last year.
• Jefferson County, Alabama, home of the state's capital, filed for bankruptcy that was brought on in part by a corruption-plagued sewer project. The roughly $5 billion at stake makes it the largest municipal bankruptcy in U.S. history, exceeding even the $2 billion owed by Orange County, California, when it collapsed in 1994.
• A $2.5 billion increase in exports helped cut the September U.S. trade deficit to $43.1 billion, according to the Bureau of Economic Analysis.


Eye on the Week Ahead

As new governments in both Italy and Greece attempt to address budget issues, domestic data will focus on manufacturing, inflation, and retail sales. Investors also will be watching the direction of yields at various European bond auctions. And as the congressional supercommittee's November 23 deadline approaches, its progress (or lack thereof) could begin to draw attention.



Key dates and data releases: wholesale inflation, retail sales, business inventories, Empire State manufacturing survey (11/15); Philadelphia Fed manufacturing survey, housing starts (11/17); options expiration, leading economic indicators (11/18).

Data source: Includes data provided by Brounes & Associates. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. Equities data reflect price change, not total return.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment.

Prepared by Lee Davis** and Broadridge Investor Communication Solutions, Inc. Copyright 2011