Four In Four Report

Richard Suttmeier is the Chief Market Strategist at www.ValuEngine.com. ValuEngine is a fundamentally-based quant research firm in Princeton, NJ. ValuEngine covers over 5,000 stocks every day. A variety of newsletters and portfolios containing Suttmeier's detailed research, stock picks, and commentary can be found HERE. Suttmeier's Four in Four video can be watched on the web HERE.

September 10, 2009 – The Beige Book, Healthcare, and the Weak Consumer The Beige Book gossip column from the Federal Reserve shows signs of fragile stability. Healthcare is an issue for small businesses. The Recovery could hit a Wall. The S&P 500 Beige Book Shows Sluggish Economic Growth at Best Economic activity continued to stabilize in July and August, but problems remain below the surface. Let’s start with the consumer, which is 70% of the US economy. Consumer spending remained soft in most Districts and retail sales were flat. Most Districts reported some improvements in residential real estate, but home prices continued to decline. This is the boost from the $8,000 first time home buyer tax rebate, which ends November 30th. Not helping the housing market is the fact that loan demand is weak with continued tight credit standards. Commercial real estate remains weak and nonresidential construction continued to decline. Where are those shovel ready projects? They don’t show up in the Beige Book! Labor market conditions remained weak across all Districts. There has been an up-tick in temporary hiring and a decline in the pace of layoffs. Job creation seems a long way off with 9.1 million part-timers. The “Real Unemployment Rate” is around 16.5%. Healthcare is a major issue for small businesses and consumers Consider a residential window and door company in Tampa Bay. Three years ago business was booming and the company had 40 employees and 9 subcontractors. With the collapse of the housing market they are struggling to keep 6 employees and 2 subcontractors. They provided a healthcare plan, but the cost of that plan is now 49% higher. Rather than canceling health insurance and after and company study by the remaining employees, they kept the plan with employees covering the cost increases. The Federal Reserve tells us there is no risk of inflation, but what about the cost of living. With 9.1 million Americans underemployed and picking up healthcare costs, take home pay does

not cover household expenses. This is an economic drag, and indicates that citizens are adjusting to a lower standard of living. Other Signs that the Economic Recovery may hit a Wall The Conference Board's Employment Trends Index declined 0.1% in August and is down 18.5% year over year. According to a Manpower survey hiring plans for the 4th are the lowest in the history of their survey. Consumer credit declined a record $21.5 billion in July to $2.47 trillion. The annual decline is now 10.5% as Americans are paying down debt instead of increasing spending. ABC's Consumer Confidence Poll slipped to -48 from -45 this week. Only 25% of Americans are in the mood to buy things, and just 8% rated the national economy positively. The daily and weekly charts for the S&P 500 The daily chart for the S&P 500 remains positive on a close today above its 21-day simple moving average at 1011.89 with the August 28th high at 1039.47 and up trend resistance at 1052.47. The weekly chart for the S&P 500 remains extremely overbought with a MOJO reading of 9.0. SPX remains positive, but overbought on a weekly close above the five-week modified moving average at 999.83. The Ascending Wedge resistance is 1053.40. Send me your comments and questions to [email protected]. For more information on our products and services visit www.ValuEngine.com That’s today’s Four in Four. Have a great day. Richard Suttmeier Chief Market Strategist ValuEngine.com (800) 381-5576 As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website www.ValuEngine.com. I have daily, weekly, monthly, and quarterly newsletters available that track a variety of equity and other data parameters as well as my most up-to-date analysis of world markets. My newest products include a weekly ETF newsletter as well as the ValuTrader Model Portfolio newsletter. I hope that you will go to www.ValuEngine.com and review some of the sample issues of my research.

“I Hold No Positions in the Stocks I Cover.”