Economic Update – September 26, 2011

Last week markets fell as investors assessed the news and political efforts to stabilize the world economies.

Among the headlines, the Federal Reserve released a statement in which they committed $400 billion to buying longer-term Treasuries. This reinforces their commitment to keeping long-term interest rates low, and indicates their perception that economic growth remains slow.

On the global front the spotlight is on Europe’s debt problems, which continue to create recessionary concerns and uncertainty.  In response, the finance ministers and central bank governors from the “Group of 20” pledged they would make a “strong and coordinated international response to address the renewed challenges facing the global economy”. This was a welcome declaration, yet confidence remained lacking as buyers continued to be scarce.

This week’s market response will depended in part, on the market’s interpretation of upcoming key economic reporting events.  We will be monitoring the S&P Case-Shiller home price index; the Conference Board’s September consumer confidence index; durable goods orders; Germany’s vote on expanding the Eurozone bailout fund; August consumer spending; and the University of Michigan’s final September consumer sentiment survey.

We remain committed to our investment philosophy and focused on our evaluation of the economic events.

Please call us if you have additional questions or concerns.