Normal Volatility and Father's Day

Happy Father's Day to all of the Fathers, you have a very important job. This newsletter will be relatively short with a weekly review from Vanguard, weekly observations, and finally Father's Day facts.

Vanguard Weekly Review.

The Conference Board's latest report on leading economic indicators suggests that the U.S. economy continues to expand, but at a subdued pace. Meanwhile, prices fell for both consumers and producers in May, signaling that inflation is likely a distant threat at this point. Housing starts also slipped last month after the government ceased offering tax credits to first-time home buyers. On a positive note, production in our nation's factories continues to surge. For the week ending June 18, the S&P 500 Index rose 2.4% to 1,117.50 (for a year-to-date total return—including price change plus dividends—of about 1.2%). The yield of the 10-year U.S. Treasury note stayed at 3.24% again for the week (for a year-to-date decrease of 61 basis points).

Weekly Observations:

This week the Volatility Index, VIX, returned to a normal range. Because of this the potential for large downside moves has been removed and accounts have been returned to a normal position. Last week, on my trip to Chicago it has become obvious that business has improved and people are travelling, a very bullish sign.

The most important news this week was the right people are talking about reducing the national debt. While this is very important for the long term future, it does indicate an upcoming reduction in government employment keeping the unemployment rate stubbornly high. With ths said, the jobs statistic to focus on will be hours worked and job growth in the manufacturing and service sectors.

Father's Day Trivia:

The idea of Father’s Day was conceived by Sonora Dodd of Spokane, Wash., while she listened to a Mother’s Day sermon in 1909. Dodd wanted a special day to honor her father, William Smart, a widowed Civil War veteran who was left to raise his six children on a farm. A day in June was chosen for the first Father’s Day celebration — June 19, 1910, proclaimed by Spokane’s mayor because it was the month of Smart’s birth.

The first presidential proclamation honoring fathers was issued in 1966 when President Lyndon Johnson designated the third Sunday in June as Father’s Day. Father’s Day has been celebrated annually since 1972 when President Richard Nixon signed the public law that made it permanent.