« back to News section

KENNETH FORD

President & LPL Wealth Advisor 201 798 7992 ken.ford@lpl.com

November 12, 2007

The Markets

It was a bit rocky on Wall Street last week. The list of headline-grabbing news included: the resignation of Citigroup CEO Chuck Prince over subprime losses, a $39 billion quarterly loss from GM (mostly from a one-time charge), a falling dollar, soaring gold and oil prices, declining consumer sentiment, and a weak October retail sales report, according to various reports from Barron’s and MarketWatch. The net result was falling stock prices.

Stay tuned this week for reports from the US Treasury Budget (Tues), Producer Price Index (Wed) and Consumer Price Index (Thur), as well as Retail Sales and Business Inventories (Wed) and Industrial Production (Fri). As always we'll be watching the market so you don't have to. Have a great week!

Top Headlines:

• Wall Street was shaken early Monday morning as Citigroup reported an $11 bln write-down and announced the departure of chief executive Charles Prince. The announcement sent futures lower in early trading Monday, resulting in the market's gap to the downside at the open. (11/5)
• The ISM Services Index reported growth for the month of October, rising to a level of 55.8%. Mining and Retail Trade were among the nine industry groups reporting growth. (11/5)
• Productivity figures reported by the Labor Department this week marked the fasted growth in four years at 4.9%, though some excitement was subdued when 2Q results were revised lower to 2.2%. (11/7)
• The dollar fell to new lows this week after Chinese officials announced that they will convert more of their foreign exchange stockpiles to stronger currencies such as the Euro. Rising oil prices and the housing credit crunch are blamed as two primary factors for the dollar's recent decline in respect to the Euro. (11/7)

Celebrating the bravery and dedication of our veterans

Throughout the history of America, the men and women of the U.S. Armed Forces have made sacrifices to ensure that all citizens of our great country have the freedom to enjoy life, liberty, and the pursuit of happiness. Our soldiers have forfeited time with families, career advancement, physical and mental health, and their lives, fighting at the behest of the United States government and its citizens. We owe them a debt of thanks that is difficult to repay.

While Memorial Day celebrates veterans who have given their lives for our country, Veterans Day celebrates all veterans for their bravery and dedication. It is celebrated on what was once called Armistice Day. (During WWI, fighting ended when the Germans signed the Armistice Treaty at the 11th hour on the 11th day of the 11th month.)

This year celebrate one of the many veterans who are all around us. They are our family members, our neighbors, and our friends. They may have served in WWII, the Korean War, the Vietnam War, the Persian Gulf War, or the current conflicts in Afghanistan and Iraq.

You may even want to encourage your favorite veteran to share his or her stories, letters, and thoughts through the Veterans History Project, an endeavor of the Folklife Center of the Library of Congress. The project collects and preserves stories of wartime service. You can learn more by visiting www.loc.gov/vets/vets-home.html.

The Search for Less Expensive Power
Renewable energy sources are looking more attractive as oil prices drift ever higher.

The rules of supply and demand never change. In this case, demand for oil has been growing and world oil production has been almost flat. That has led to higher prices, and analysts expect prices to stay high because there have been no major new oil finds in decades.

As oil prices have gone up, the cost of goods produced by industries that rely on oil have risen. Not only is the price of gas higher at the pump, the cost of energy is increasing, too. One effect of higher oil prices is likely to be an increase in the popularity of renewable energy. In the past, generating power from alternative energy sources—sun, wind, and waves—was too expensive relative to cheap fossil fuel sources. Now, as the cost of traditional energy increases, demand for alternatives is expected to grow.

Solar Energy
Wal-Mart—that cost-conscious retailer—is going solar! In May the company announced that it plans to install solar rooftop panels on stores in California and Hawaii. The new solar energy systems are expected to provide a significant amount of power for less than the company currently pays to local utility companies. Wal-Mart is not alone. During the past few years, the use of solar panels has increased by 30% each year in the United States.

Although it takes some time to research, install, and maintain a system, many people enjoy the independence and security they gain by having their own energy system. If the system doesn’t generate as much power as you use, your home can be connected to the traditional power grid, too.

Wind Power
The sight of fields filled with giant wind turbines is becoming more common across the United States. In fact, the United States is a great source for wind energy. In theory, there is enough wind power flowing across the United States to satisfy all of our electricity needs, according to the American Wind Energy Association.

The first giant wind farms were built in the early 1980’s. Back then, wind generated electricity cost about 30 cents per kilowatt hour. In the intervening decades, the cost has dropped by 80%, to 5 cents per kilowatt hour. And costs continue to fall as more and larger plants are built and technology improves.

Wave Power
Many nations and companies are beginning to look to at waves as potential power sources. Water is 800 times denser than air at sea level. As a result, slow-moving waves have the potential to generate more electricity than wind turbines in high winds. Also, waves are more predictable than wind or sun. They can be tracked while they are far from shore, allowing scientists to predict electrical output.

Wave farms aren’t nearly as prevalent as wind farms. Scotland will soon be home to a 3 megawatt wave farm, and Portugal will soon boast wave power plants that may generate as much as 20% of that country’s power. In the United States a commercial wave power park is being built in Oregon. Some experts believe that the United States will produce 10 gigawatts of wave power—that’s enough to power 4.3 million households—within ten years.

What Will the Future Hold?
Governments, companies, and entrepreneurs are all working to identify and develop alternative power sources. If oil grows scarce and prices stay high, we may all become more reliant on renewable energy sources for our everyday comforts.

Can you rearrange all the numbers in the boxes so no two consecutive numbers
are right next to each other horizontally, vertically or diagonally?

Click here for the answer.

Best Regards,

* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
* The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks.
* The Nasdaq Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Consult your financial professional before making any investment decision.
* Past performance does not guarantee future results.