QUARTERLY ECONOMIC UPDATE: Q1 2012

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THE QUARTER IN BRIEF

Dow, +8.14%. S&P 500, +12.00%. NASDAQ, +18.67%. These numbers resemble a good year on Wall Street �” and these were simply the advances from the first quarter. While stocks may or may not climb higher for the rest of the year, investors could certainly cheer the opening quarter of 2012 – the best quarter for U.S. equities in nearly 14 years. Q1 2012 was also notable for an ascent in oil futures and retail gas prices, resilience in consumer spending and the service and manufacturing sectors, and lingering ambiguity over the real estate market. The debt issues and apparent recession in Europe, the concerns over factory output worldwide, the uninspiring earnings season stateside �” these concerns seemed to matter less this quarter as investors grew more optimistic.1

DOMESTIC ECONOMIC HEALTH

America was seeing job growth. The unemployment rate dipped 0.2% to 8.3% in January and stayed there in February �” and 8.3% was the lowest jobless rate since February 2009. Non-farm payrolls swelled by 227,000 positions in February �” the third month in a row with net job gains of more than 200,000 �” and economists polled by Reuters think that the March report will show 203,000 new jobs in the economy. Four months in a row with 200,000 in net job gains? If it happens, that will be a factoid unmatched since 1999.2,3

Consumer inflation rose 0.2% in January and 0.4% in February. By February, annualized inflation was running at 2.9% with annualized core CPI at 2.2%. Producer prices were up 0.1% for January, 0.4% in February and 3.3% annually in February (the smallest 12-month increase since August 2010). Fuel costs played a big role in all this.4,5

As pump prices climbed higher, consumer spending increased. Commerce Department data showed personal spending advancing 0.8% in February, with the January gain revised up to 0.4%. By February, the personal savings rate was down to 3.7%, the lowest since August 2009. Consumer confidence also rose in the quarter, with the final March University of Michigan survey coming in at 76.2 (a 12-month peak) and the Conference Board’s March consumer confidence index at 70.2 (down 1.4 points from February).6,7

The Institute for Supply Management’s manufacturing and non-manufacturing indices both stayed above 50. ISM’s manufacturing gauge came in at 52.4 in February and 53.4 in March; its service sector index was at 56.8 in January and 57.3 in February. Federal government figures showed that durable goods orders were up 1.3% in February after falling 1.1% in January. Speaking of hard goods, Chrysler and General Motors reported U.S. sales respectively up 34% and 12% in March, while Ford recorded its best March sales since 2007.8,9,10

For once, Capitol Hill was a relatively quiet place. The big economic news item was the introduction of President Obama’s 2013 federal budget proposal, which formally presented some of the ideas he (and his advisors) had talked about for months �” a “Buffett Rule” that would set income taxes at 30% for Americans making more than $1 million annually, increasing the top two tax brackets to 36% and 39.6%, limiting itemized deductions for those falling into those tax brackets, taxing dividends asordinary income, hiking capital gains taxes to 20% for all taxpayers except those in the 10% and 15% tax brackets, and resetting the estate tax to 45% while keeping the personal exemption at the current $3.5 million.11

GLOBAL ECONOMIC HEALTH

Eurozone finance ministers arranged a third (and presumably final) rescue package of €237 billion for Greece in February �” €107 billion in haircuts to Greece’s bond investors plus €130 billion in loans to its government. Moreover, two cash infusions by the European Central Bank to the EU’s commercial banks �” one in December, another in March �” aided the global stock rally seen in the first quarter. So on and off the continent, there were sighs of relief. Yet economists were in agreement as the quarter ended: the Eurozone seemed to be tipping into a recession or was already within one. The EU jobless rate was 10.8% in March (Germany, the EU’s prime economy, was faring better with only 5.7% unemployment). The EU’s Markit PMI was below 50 for the eighth straight month in March. 12,13,14

Were Asian economies slowing down? In March, the Chinese government lowered its GDP target for the first time since 2005, projecting 7.5% growth this year as opposed to 2011’s 8.0% target. China’s actual GDP was 8.9% in 4Q 2011 (the smallest in ten quarters), and its inflation rate had reduced to 4.5% from the 37-month high of 6.5% set last July. As for manufacturing, key PMIs were above 50 as the quarter ended: 53.1 in China, 54.7 in India and 52.0 in South Korea.15,16

WORLD MARKETSWatch movie online The Transporter Refueled (2015)

What was the world’s best-performing major index in Q1 2012? Would you believe the Nikkei 225? The Japanese benchmark rose 19.3% for the quarter, according to the Wall Street Journal. Other benchmarks rising in double digits for Q1 2012: Bovespa, 13.7%; RTSI, 18.5%; DAX, 17.8%; KSE 100, 21.3%; PSE Composite, 16.8%; Sensex, 12.6%; Hang Seng, 11.5%; Dow Jones Global Indexes, 11.5%. Other gains from the quarter: Australian All Ordinaries, 7.5%; TSX Composite, 3.7%; Shanghai Composite, 2.9%; CAC 40, 8.4%; FTSE 100, 3.5%. The MSCI World Index rose 10.9% on the quarter; its sibling, the MSCI Emerging Markets index, climbed 13.7%.17,18

COMMODITIES MARKETS

On the whole, Q1 2012 was quite good for the broad commodities sector. Gold went +6.7%, silver +16.4%, platinum +17.0%, and copper +11.3%. Palladium actually pulled back a bit, losing 0.3% for the quarter. Gold ended the quarter at $1,671.90 on the COMEX. NYMEX crude advanced 4.2% last quarter, which paled compared to the Q1 gains for heating oil (8.9%), RBOB gasoline (24.5%) and retail gasoline (19.8%). Natural gas futures dropped 28.9% with the warmer winter. Oil ended the quarter at $103.02 a barrel, unleaded gasoline at $3.93 a gallon. As for headline crops, wheat went +1.2%, cotton +2.4%, corn -0.4% and coffee -19.4% in the first three months of 2012. The U.S. Dollar Index (though it strengthened in March) lost 1.7% for the quarter.19,20

REAL ESTATE

Was the market improving? Or at least ready for a turnaround? Optimists could take heart in some compelling statistics. By February, existing home sales were up 8.8% year-over-year and 13% improved from July, according to the National Association of Realtors. NAR also found that the sales pace in January was the strongest since May 2010, and home prices rose for the first time in four months in February. The Commerce Department noted that February’s new home sales were up 11.4% from 12 months ago; February also brought the greatest number of requests for building permits since October 2008. By February, NAR had pending home sales 9.2% improved from a year prior. However, the January S&P/Case-Shiller Home Price Index (which came out last month) showed that home prices had fallen 3.8% year-over-year, with prices essentially resetting to early 2003 levels.21,22,23,24

Across the quarter, there was really very little change in mortgage interest rates. Comparing Freddie Mac’s Primary Mortgage Market Surveys of December 29 and March 29, we see mortgage interest rates moving like so: 30-year FRMs, 3.95% to 3.99%; 15-year FRMs, 3.24% to 3.23%; 5-year ARMs, 2.88% to 2.90%. Interest rates on 1-year ARMs were averaging 2.78% in both snapshots.25,26

LOOKING BACK…LOOKING FORWARD

Climbing above 3,000 for the first time since the dot-com boom, the NASDAQ had its best quarter since 1991. The Dow ended the first quarter by advancing for a sixth straight month. The Russell 2000 gained 12.06% for the quarter and the CBOE VIX (the “fear index”) fell 33.76%.1


So how much of these gains can stocks hold? It may be that the momentum generated by the market in the first quarter persists -appetite for riskier assets has increased worldwide along with investor optimism, and it may not be easily or readily doused. Then again, the data stream from the U.S. is really encouraging for foreign investors at a time when indicators from their regions are underwhelming. Spain and Portugal are still question marks in the Eurozone, even after the two sizable cash injections into the European banking system by the ECB and March’s hike in the region’s bailout fund reserve to €700 billion. So fingers are crossed that the U.S. bull market can weather a potential Iberian debt debacle come spring and summer.1

These views are those of Conrad Capital Management, Inc. They are not the views of Representative’s Broker/Dealer, and should not be construed as investment advice. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. 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. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions �” the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. BSE Sensex or Bombay Stock Exchange Sensitivity Index is a value-weighted index composed of 30 stocks that started January 1, 1986. The CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. The FTSE 100 Index is a share index of the 100 most highly capitalized companies listed on the London Stock Exchange. The Hang Seng Index is a free-float capitalization-weighted index of selection of companies from the Stock Exchange of Hong Kong. Nikkei 225 (Ticker: ^N225) is a stock market index for the Tokyo Stock Exchange (TSE). The Nikkei average is the most watched index of Asian stocks. The S&P/ASX All Ordinaries Index represents the 500 largest companies in the Australian equities market. The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization. The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange. The DAX 30 is a Blue Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The MSCI World Index is a free-float weighted equity index that includes developed world markets, and does not include emerging markets. The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The Dow Jones-UBS Commodity Index DJ-UBSCI is a broadly diversified index that allows investors to track commodity futures through a single, simple measure. It currently has 19 commodity futures in seven sectors. The US Dollar Index measures the performance of the U.S. dollar against a basket of six currencies. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Conrad Capital Management, Inc.
1377 Motor Parkway, Suite 406
Islandia, NY 11749
Phone: (631) 439-7878
Fax: (631) 439-7879
www.conradcapital.com

Citations.
1 – cnbc.com/id/46903719 [3/30/12]
2 – www.ncsl.org/issues-research/labor/national-employment-monthly-update.aspx [3/9/12]
3 – www.reuters.com/article/2012/04/03/us-usa-economy-jobs-idUSBRE83212A20120403 [4/3/12]
4 – bls.gov/news.release/pdf/cpi.pdf [3/16/12]
5 – bls.gov/news.release/pdf/ppi.pdf [3/15/12]
6 – www.nytimes.com/2012/03/31/business/economy/consumer-spending-rises.html [3/31/12]
7 – www.conference-board.org/data/consumerconfidence.cfm [3/27/12]
8 – www.ism.ws/ISMReport/MfgROB.cfm [4/2/12]
9 – www.ism.ws/ISMReport/NonMfgROB.cfm [3/5/12]
10 – www.latimes.com/business/money/la-fi-mo-factory-orders-20120403,0,5874175.story [4/3/12]
11 – www.bankrate.com/finance/news/obama-2013-budget-takes-aim-at-wealthy.aspx [2/13/12]
12 – www.channelnewsasia.com/stories/afp_world_business/view/1186463/1/.html [3/2/12]
13 – www.businessday.co.za/articles/Content.aspx?id=168912 [4/3/12]
14 – www.bbc.co.uk/news/business-17582051 [4/2/12]
15 – www.reuters.com/article/2012/04/02/us-global-economy-asia-idUSBRE83104P20120402 [4/2/12]
16 – business-standard.com/india/news/china-gdp-target-at-75-lowered-first-time-in-7-yrs/159505/on [3/5/12]
17 – online.wsj.com/mdc/public/page/2_3022-intlstkidx.html [3/30/12]
18 – mscibarra.com/products/indices/international_equity_indices/gimi/stdindex/performance.html [3/30/12]
19 – money.msn.com/market-news/post.aspx?post=087cac64-3d67-4737-b94a-31c3ff49ba16 [3/30/12]
20 – bullionpricestoday.com/bullion-prices-mixed-in-first-quarter-2012/ [3/31/12]
21 – www.usatoday.com/money/economy/housing/story/2012-03-21/existing-home-sales-february/53682350/1 [3/21/12]
22 – www.csmonitor.com/Business/Paper-Economy/2012/0326/Pending-home-sales-slightly-down-in-February-but-up-since-2011 [3/26/12]
23 – www.kansascity.com/2012/03/27/3518641/case-shiller-home-price-index.html [3/27/12]
24 – montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [10/5/12]
25 – www.freddiemac.com/pmms/ [4/3/12]
26 – www.freddiemac.com/pmms/index.html?year=2011 [4/3/12]
27 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F30%2F11&x=0&y=0 [3/30/12]
27 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F30%2F11&x=0&y=0 [3/30/12]
27 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F30%2F11&x=0&y=0 [3/30/12]
27 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F28%2F02&x=0&y=0 [3/30/12]
27 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F28%2F02&x=0&y=0 [3/30/12]
27 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F28%2F02&x=0&y=0 [3/30/12]
28 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/30/12]
28 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/30/12]
29 – treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm10902.pdf [1/9/02]
This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice to your situation.

Conrad Capital Management, Inc.
1377 Motor Parkway, Suite 406
Islandia, NY 11749, USA
Tel: (631) 439-7878 Fax: (631) 439-7879
E-mail: info@conradcapital.com

Important Consumer Disclosures:
Conrad Capital Management, Inc. is a an Independent Registered Investment Advisor with headquarters located in
Islandia, New York

Donald Conrad of Conrad Capital Management recognized for excellence in service to area medical professionals

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Area Financial Services Executive Receives National Health Care Recognition Islandia, NY (April 26, 2012) – According to the Bureau of Labor Statistics, there are approximately 700,000 physicians in the United States who work in excess of 60 hours per week.  While their earning potential is the highest among any profession in the US, a blizzard of government regulations and a host of clinical and economic issues leave little time for a doctor to manage their professional and personal lives.

In response, an elite group of professionals is emerging as specialists to the medical community.  In recognition of his work with area health care executives and physicians, Donald Conrad of Conrad Capital Management has been named an MD Preferred Affiliated Financial Services Professional.  Each year, US Medical Specialties, Inc., an international medical consulting firm, recognizes excellence in service to the medical community in a number of disciplines including real estate, mortgage lending, insurance, accounting, banking, financial and legal services.  The goals of the MD Preferred Program include identifying, acknowledging and promoting professionals who provide service excellence to the medical community.

The program provides physicians with an online resource center where they can find profiles of “doctor friendly” professionals who are committed to providing a quality service experience.  “Doctors are very busy professionals,” observed Michael O’Malley, Project Manager of MD Preferred Services.  “When it comes to finding a financial services professional that is committed to working with physicians, they appreciate an organization that has done the research for them and has pulled a team together to make their lives easier.”

Every MD Preferred financial advisor is selected for their commitment to serving the healthcare industry.  They often work in close concert with other community based MD Preferred professionals helping area medical providers attract and retain talented physicians. MD Preferred community teams are uniquely qualified to act as recruiting partners to area practice managers and hospital
administrators.  As partners they can tell the community story while the medical recruiter tells the clinical story.  Their knowledge of the area and understanding of the special needs of physicians and their families saves everyone time and resources.

“We are proud of the recognition we have received.  In an environment of critical physician shortage, we understand that most physicians considering a career in our community will make their decision based primarily on life style issues,” Mr. Conrad observed. “The last thing we want to have happen is for that prospective physician to go elsewhere because the local support services he or she needed were either not available, were unreliable or did not meet the expectations of the physician. We are always ready to meet with area physician groups to demonstrate how a comprehensive financial plan can help physicians chart a course through today’s complex tax landscape, provide for their children’s education and assure a comfortable and secure retirement.”

 

ABOUT DONALD CONRAD

 

CCM was founded in 1998 as a registered investment advisor to families and institutions across the country. After spending 16 years working with both E.F Hutton and Paine Webber, Donald Conrad came to the realization that for him to offer truly unbiased advice to clients, he would have to become independent. Hence, Conrad Capital Management was founded. Ever since then Mr. Conrad has been acting in the capacity of an independent SEC Registered Investment Advisor (RIA), as such his only allegiance is to his clients!

When the markets became extremely volatile in 2001, Donald began searching for a way to lower risk during the tumultuous swings in the market. After a fruitless search, he created CCM Partners, LP, a proprietary Hedge Fund of Funds. Mr. Conrad serves as the General Partner of the fund which will be celebrating its 12th year of providing solid risk-adjusted performance year after year.

 

ABOUT MD PREFERRED PHYSICIAN SERVICESwatch film The Intern now

 

Each year the MD Preferred designation recognizes a diverse group of ‘doctor friendly’ professional service providers.  MD Preferred providers can be found at an online resource center, www.MDPreferredServices.com.  Access is available at no cost to the medical community.  MD Preferred also manages one of the industry’s largest medical job boards, publishes a daily medical blog and distributes a monthly E-Newsletter to every residency and fellowship program in the country.  For additional information contact Mike O’Malley at 800-260-8366.

Paladin Registry Completed a Background Check for Conrad Capital Management

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Sacramento, CA, 2012. Investors make a major mistake when their only sourceof information for financial advisor credentials, ethics, and business practices is advisors who want to sell them investment products and services. This is a risky way to select advisors who may:download movie Whiskey Tango Foxtrot

Omit, misrepresent, or exaggerate information to make the sale
Be unlicensed or sell unregistered investment products (scams)
Have a history of investor complaints, fines, and suspensions

There is a solution. Investors can use Paladin Registry’s Financial Advisor Due Diligence (FADD™) service to conduct background checks. FADD™ validates
the accuracy of advisor claims so investors select professionals with the best qualifications and not the best sales pitches.

Background checks are an essential step when investors select advisors who will
influence or control their financial decisions. Select high quality advisors and they will have more money. Select low quality advisors and they will have less money. Select Bernie Madoff and they may have no money.

Jack Waymire, founder of PaladinRegistry.com, announced, “Conrad Capital Management has successfully completed Paladin’s Background Check process and received a FADD™ certification for the documentation that is published on the Paladin Registry website. Waymire observed, “Only high quality professionals authorize background checks because they have nothing to hide. Low quality
advisors avoid background checks because this type of scrutiny exposes weaknesses and false claims.”

Donald Conrad (Islandia, NY) has worked in the financial services industry since 1981 and has been a member of Paladin since 2007. Donald Conrad is an acknowledged fiduciary who provides financial planning and investment advisory services for fees. He received a five star quality rating from Paladin Registry in January 2012.

ABOUT PALADIN REGISTRY
In 2003, Paladin began providing information services to investors who rely on planners, advisors, and money managers to help them achieve their financial goals. Paladin services include: Background Checks, Quality Ratings, and Online Documentation for professionals who received the Registry’s highest quality rating (five stars). Visit Paladin’s website www.PaladinRegistry.com for additional information.

KEY CONTACT
Donald Conrad
President
dconrad@conradcapital.com
(631)439-7878
www.conradcapital.com

Conrad Capital Management Expands Corporate Headquarters, Brings in New Hires, Opens 1st Branch Office

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Conrad Capital Management is pleased to announce that they will be moving their firm’s Corporate Headquarters from Melville, NY to Islandia, NY at the end of this month. Given CCM’s recent new hiring and ongoing firm-wide growth, they are moving to a new location that will present a bigger space and has been newly built to suit their most current needs. Additionally, CCM will have a better ability to expand into additional space when needed.

“I have been doing business in the Melville area for about 30 years now. It’s a great community and I’m going to miss it here, but we are ready for a change,” says Don Conrad, President and CEO at CCM. “Between our growing clientele and new staff on board, there is no better time to expand.”

The new office is located at 1377 Motor Parkway in Islandia, NY. Equipped with a full media and conference center, CCM looks forward to holding many successful events, speaking engagements and seminars there. There are more spacious common areas throughout the building for both clients and staff to utilize.Watch Full Movie Online Streaming Online and Download

“It’s been exciting to see how much growth we’ve been having over the past year,” says Hammid Firoozeh, Chief Operating Officer. “It will be great to utilize a new marketplace and have the opportunity to offer the added benefits of the new location to our clients and staff. We’re looking forward to making Islandia our new home.”

In an exciting addition to their move, CCM is also proud to announce the official opening of their 1st branch office location in White Plains, NY. The new office will be lead by Mr. Jared Cutler, VP of Investments and Wealth Management. Jared previously served in the Global Private Client Group of Merrill Lynch. He is indeed a great asset to the company, as he shares the same principles and dedication to the servicing of clients that CCM holds in such high regard.

In recent months CCM has brought aboard Sierra Kim, Executive Administrative Assistant and Michele Candiano, Assistant VP of Business Development. Ms. Kim comes to CCM with an MBA from Stony Brook University and is currently a Chartered Financial Analyst (CFA) Level III candidate. Ms. Candiano comes to CCM with a Bachelor’s Degree in marketing from FIT and five years of previous experience in marketing and business development. Both Sierra and Michele are quickly becoming key components to supporting the research, analysis, client service, and client development areas. In addition, they serve as integral components throughout the growth process of the firm and help to maintain the personalized and service-oriented culture that CCM thrives on.

The team is taking a multitude of positive strides towards 2011. Please check the CCM website for upcoming seminars and announcements. If you’d like to receive future press releases directly from CCM, please email info@conradcapital.com.

This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice to your situation.

Conrad Capital Management, Inc.
1377 Motor Parkway, Suite 406
Islandia, NY 11749, USA
Tel: (631) 439-7878 Fax: (631) 439-7879
E-mail: info@conradcapital.com

Important Consumer Disclosures:
Conrad Capital Management, Inc. is a an Independent Registered Investment Advisor with headquarters located in Islandia, New York