August Economic Figures Point to Defensive Investment Strategies, Flight to Quality, According to Farmers and Merchants Trust Company Report
Long Beach, CA, September 28, 2011 --(PR.com)-- Economic fundamentals continued their downward trend in August, pointing to a need for principal preservation and defensive investment strategies according to Farmers and Merchants Trust Company’s (FMTC) August Economic Commentary.
“While many analysts adjusted their growth projections downward in August, expectations may still be too high,” said Jay Ferrara, vice president and investment officer with FMTC. “The continued stagnation of the job market and ongoing concerns with both global and domestic debt has created a highly unpredictable investment climate. As a result, principal preservation with a focus on long-term, steady growth should be a primary focus for investors.”
Key benchmarks for the month of August include the following:
· Equity benchmarks posted the fourth straight monthly decline
· Growth estimates continue to be downgraded to account for deteriorating economic fundamentals
· 10-Year U.S. Treasury is approaching 2% and investors are demonstrating a “flight to quality” mentality much like during the summer of 2008
· The unemployment rate reached 9.1%, with underemployment eclipsing 16%
· U.S. GDP is headed downward for the remainder of 2011 and into 2012
· Regional manufacturing indicators have pulled back sharply, causing the weakness of the manufacturing sector to re-enter the storyline
The activity (or lack thereof) of large corporations is also a key factor, according to Ferrara. “Large multinational corporations continue to sit on large levels of cash, indicating their ongoing trepidation about a recovery,” said Ferrara. “The common sentiment across all sectors is to remain ‘lean and mean,’ with regard to hiring.”
Farmers and Merchants Trust Company publishes its Economic Commentary on a monthly basis, providing insights and projections based on key economic indicators. The August report can be downloaded at http://fmtrust.com/pdf/FMTCMonthlyBenchTableandEcon082011.pdf
About Farmers and Merchants Trust Company
Farmers and Merchants Trust Company is the oldest, continuously operating trust company in California, serving multiple generations since 1920. Farmers and Merchants Trust Company was founded in its current Long Beach location, 302 Pine Ave., by the Walker family and expanded to Orange County, at 24300 Paseo de Valencia, Laguna Hills, in 2000. The Trust Company provides full-service traditional personal trust management services as well as professional investment management for a full range of clients.
Statement on Projections
The Economic Update views expressed are those of Farmers and Merchants Trust Company and are based upon information believed to be reliable. FMTC makes no representation or warranty to the accuracy of the information. The views are subject to change at any time in response to changing circumstances in the market and are not intended to predict or guarantee future performance of any individual security, market sector or the markets in general.
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“While many analysts adjusted their growth projections downward in August, expectations may still be too high,” said Jay Ferrara, vice president and investment officer with FMTC. “The continued stagnation of the job market and ongoing concerns with both global and domestic debt has created a highly unpredictable investment climate. As a result, principal preservation with a focus on long-term, steady growth should be a primary focus for investors.”
Key benchmarks for the month of August include the following:
· Equity benchmarks posted the fourth straight monthly decline
· Growth estimates continue to be downgraded to account for deteriorating economic fundamentals
· 10-Year U.S. Treasury is approaching 2% and investors are demonstrating a “flight to quality” mentality much like during the summer of 2008
· The unemployment rate reached 9.1%, with underemployment eclipsing 16%
· U.S. GDP is headed downward for the remainder of 2011 and into 2012
· Regional manufacturing indicators have pulled back sharply, causing the weakness of the manufacturing sector to re-enter the storyline
The activity (or lack thereof) of large corporations is also a key factor, according to Ferrara. “Large multinational corporations continue to sit on large levels of cash, indicating their ongoing trepidation about a recovery,” said Ferrara. “The common sentiment across all sectors is to remain ‘lean and mean,’ with regard to hiring.”
Farmers and Merchants Trust Company publishes its Economic Commentary on a monthly basis, providing insights and projections based on key economic indicators. The August report can be downloaded at http://fmtrust.com/pdf/FMTCMonthlyBenchTableandEcon082011.pdf
About Farmers and Merchants Trust Company
Farmers and Merchants Trust Company is the oldest, continuously operating trust company in California, serving multiple generations since 1920. Farmers and Merchants Trust Company was founded in its current Long Beach location, 302 Pine Ave., by the Walker family and expanded to Orange County, at 24300 Paseo de Valencia, Laguna Hills, in 2000. The Trust Company provides full-service traditional personal trust management services as well as professional investment management for a full range of clients.
Statement on Projections
The Economic Update views expressed are those of Farmers and Merchants Trust Company and are based upon information believed to be reliable. FMTC makes no representation or warranty to the accuracy of the information. The views are subject to change at any time in response to changing circumstances in the market and are not intended to predict or guarantee future performance of any individual security, market sector or the markets in general.
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Contact
Farmers and Merchants Trust Company
Jessica Fix
562-437-0011
www.fmtrust.com/
Jessica Fix
562-437-0011
www.fmtrust.com/
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