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Enron Mail |
The stock market sprang back a bit this spring in April and earlier in May.
And while the market gave back those gains at the end of May, we're still positive about prospects for the rest of 2001. Here's how things look for the year and recent month: 6/1/00 1/2/01 5/1/01 5/31/01 % chg. Yr. % chg. YTD % chg. May '01 Dow Jones 10,652 10,787 10,898 10,912 2% 1% 0% S&P 500 1,449 1,320 1,266 1,256 -13% -5% -1% Nasdaq 3,582 2,471 2,168 2,110 -41% -15% -3% * does not include reinvested dividends Dan Laufenberg, American Express Financial Corporation's chief economist, says investors have several reasons to be optimistic long term. These include: * Continued interest rate cuts - The Federal Reserve cut rates yet another half a percent in May, for a total reduction of 2.50% so far this year. Historically, such cuts have taken a few months to affect the economy and market - but the eventual result has often been a substantial upturn for both. * Newly passed tax cuts - Congress has passed a $1.35 trillion, wide-ranging tax-cut package that should put extra dollars into U.S. consumers' pockets soon. That, in turn, could eventually boost corporate profits and stock prices. * Signs of a strengthening economy - The upturn in stocks this spring, continued rate cuts and the prospect of lower taxes all helped boost consumer confidence in May. The New York-based Conference Board said its Consumer Confidence Index jumped in May to 115.5 from 109.9 - more than economists expected. The rise in confidence is important since consumers are a major driver of the U.S. economy. Dan Laufenberg says these positive developments support his forecast of stronger economic growth - and potential stock market improvement - through the rest of the year. However, he adds that the economy remains vulnerable and volatility could continue, so a long-term investment focus is best. I'll keep you informed as economic and market developments continue. Thank you for your loyalty and understanding as we ride out this market correction. Best regards, "Make all you can, save all you can, give all you can." John Wesley Byron W. Ellis, CFPTM, CLU, ChFC Senior Financial Advisor American Express Financial Advisors IDS Life Insurance Company 1450 Lake Robbins Drive Suite 100 The Woodlands, TX 77380 Phone 281.367.8658 Fax 281.364.9628 E mail byronellis@usa.net - winmail.dat
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