THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION DISCUSSED DURING HAWKTRADE MEETINGS.  Past performance does not guarantee future results. Investment returns and principal value will fluctuate, so that investors' shares, when sold, may be worth more or less than their original cost. Investing in any financial instruments does not guarantee that an investor will make money, avoid losing capital, or indicate that the investment is risk-free. There are no absolute guarantees in investing. HAWKTRADE and its members do not bear any responsibility for losses or gains made by members trading on their personal accounts based on analysis from HAWKTRADE meetings.

Tonight’s Agenda

Announcements

Investment Competition Update

No Tapering!!

Replacing Bernake

Newcomer’s Information We meet every Sunday at 7:15PM – 8:15PM at

W151 in PBB

Membership Dues: $20/semester Food/Drinks every meeting Investment information and education Great trading tips and strategies

Investment Competition: $15/semester Best way to gain experience and learn Past prizes include iPads, Apple TVs, gift cards

Fun Discussion atmosphere, member involvement

Investment competition

$15 to enter competition All money goes to prizes so more people

= better prizes Must attend 50% of meetings in order to

be eligible for prizes Top 8 get prizes (tentatively) Won’t allow high frequency trading or

anything that is unrealistic

Starts tomorrow!

Fed Meeting Background

Federal Reserve – serves as the central bank of the U.S.

Dual Mandate – Maximum Employment, Price Stability (low inflation)

QE3 - $85 billion a month in Treasury Bond and mortgage-backed securities

Keeps interest rates low by encouraging banks extend loans

Hopes to encourage growth through investment due to low interest rates

CNBC poll – economists expected tapering by $15 million a month

Wednesday Tapering Announcement

NO TAPERING!! $85 billion a month treasury and mortgage

bond buying program to continue Inflation in control and unemployment too

high Fiscal tightening in Washington remains a

significant obstacle Dow and S&P 500 soar to record levels

Fed Keeps Bond Buying Program Intact

Wed 18 Sep 13 | 2:00 PM ET

Market Jump

$26 Billion flowed into ETF’s ETF – Exchange Traded Fund Gives investors simplicity but

diversification Various types of ETF’s

Track indexes Track international markets Sector strategy Bonds Investment Styles Leveraged

Potential plays

RATES RISE

TMV – Direxion daily 20+ year treasury bear 3x shares

TYO – Direxion daily 7-10 year treasury bear 3x shares

RATES LOWER

TMF – Direxion daily 20+ year treasury bull 3x shares

TYD – Direxion daily 7-10 year treasury bull 3x shares

-4.16%

-4.06%

+3.74%

+4.71%

The Federal Reserve’s Dual Mandate

Maximum Employment

Price Stability (low inflation)

Fed Targets

Unemployment < 6%Inflation < 2%

ACTUAL?

Unemployment 7.3%Inflation 1.5%

Unemployment Rate

7.3% current

Consumer Price Index Measure of the change in the average price level of a fixed basket of

goods and services purchased by consumers

Actual: 0.1% Consensus: 0.0% to 0.3% Prior: 0.2%

“The latest consumer inflation numbers are tame and will not be pressuring the Fed to taper in a hurry” – Bloomberg.com

Jobless Claims

Actual: 309,000 Consensus: 320k to 350k Prior: 294k

Issues in California and Nevada led to an undercount in previous period

Employment situation – October 4th

Reaction

“This is incredibly wimpy” – David Kelly, Chief Global Strategist at JPMorgan Funds

“The idea that the economy is still too weak to taper and market goes up has its limits. If we keep going we are taking away from future returns.” - Leon Cooperman, manager of the Omega Advisors

“The Fed understands, as the market seems not to, that the current 'recovery' could not survive without continuation of massive monetary stimulus," - Peter Schiff, CEO of Euro Pacific Capital

Tapering Continued

With a weak economy the Fed delays move to withdraw stimulus

When will they reduce the amount of bond purchases?

How much of a reduction is expected?

Federal Reserve Chairman

Most powerful economic policy-making job

Head of central banking system

Manages monetary policy

Bernanke’s term ends in January

President appointment with Senate

approval

Search for new successor

Lawrence Summers

Announced withdrawal from consideration

Former Treasury Secretary

Considered Obama’s top choice

Favors deregulation

Market reacted positively on Monday

Markets Reaction

Last Friday (9/13) – Last Monday (9/16) Summers announcement led to positive market opening

Monday Dow Futures jumped more than 160 10-year Treasury Note Yield fell to 2.82 percent

Janet Yellen

Expected to lead Fed

More dovish (continue stimulus)

Favors regulation

Guide towards economic recovery

Must decrease unemployment and enhance job growth

Interest Rate Levels

Yellen expected to keep interest rates low Resulting in continued investments in stocks

The new Dow Jones

Out with: Alcoa (AA), Hewlett-Packard (HPQ) and Bank of America (BAC)

New companies: Nike (NKE), Goldman Sachs (GS) and Visa (V)

Last change happened a year ago

Microsoft lowers dividend

Microsoft CEO Steve Ballmer retiring Microsoft (MSFT) increased divided

22% (now at 28 cents per share, quarterly)

Announced new $40 billion dollar stock buyback plan

In Other News…

GTA sales hit $1 Billion in three days,

faster than any other video game or

movie

IOS 7 released

Upcoming Events Wednesday

Durable Goods Orders New Home Sales

Thursday GDP Jobless Claims

Friday Personal Income and Outlays