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US markets were finally up last week, breaking the recent streak of weekly losses. The G8 summit was held recently and offered some interesting insights into how the EU views Greece and the soverign debt crisis which seems to be spreading throughout the region. Once again most of the US economic news from last week was positive showing continued signs of strenghening.

Markets seemed to have found a bottom (for now) after 3 straight weeks of losses. The main driver of bearish economic news continues to be the Euro Zone. The G8 summit meeting was held recently and lined out a few serious problems that the Euro Zone countries will need to address… 1) Germany and France have very different approaches when it comes to austerity, thus creating uncertainty around future policies, 2) Greece, Spain and Italy continue to experience a “run on their banks” as depositors liquidate their holdings and move money to other banks in other currencies outside of those countries, 3) imports from China to the Euro Zone are down dramatically due to the soverign debt crisis, thus causing an unexpected slowdown in China. The EU and global investors seem to be in a “wait and see” pattern as everyone waits for the June 17th elections in Greece.

Economic figures in the US continue to strengthen which seems to be what is keeping global markets from a broader sell-off. Interest rates in the US continue to hit historic lows as global investors seek the safety of US treasuries. 75% of all mortgage applications are now refinances and according to the Mortgage Bankers Association, refinances are up 9% overall. In other positive US housing news, the National Association of Realtors and the US Commerce department reported that existing homes sales were up about 3% in April.

Last week the FDIC reported that bank profits rose to their highest levels in about 5 years. In addition, the number of banks on the FDIC “watch list” decreased for the first time in a few years. In addition to this positive news from the FDIC, the latest consumer sentiment index showed a reading of 79.3 which marks the highest level it has reached since October of 2007. This came as a big surprise to analysts who expected the number to fall. This is an important factor for investors to consider as consumers make up approximately 70% of US GDP.

Last, but certainly not least, we would like to thank all of our current and former service men and women who have sacrificed so much to establish and maintain our freedom. Without your courage and sacrifice the United States would not be the world leader it is today. THANK YOU from everyone at Klaas Financial.

*This is for illustrative purposes only and is not indicative of any investments. Investment value will fluctuate with market conditions. Past performance is no guarantee of future results.

(Sources: finance.yahoo.com, www.bloomberg.com, IInvestors Business daily. www.economy.com, www.ny.frb.org, www.newyorkfed.com, www.mworld.com, www.htrnews.com, www.wsj.com)