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Numerous Challenges and Opportunities Ahead
November 5, 2012
US equities markets were lower last month S&P 500 Index (SPX) - Daily Chart
along with most commodities as concerns of a
slowing economy overshadowed investors and the
politicians for most of the month. While tomorrow’s
elections were the focus last month that appears to
have changed with the arrival of Hurricane Sandy.
Now the mixture of the political landscape, global
and domestic economies, and recovery from the
“Frankenstorm” is providing investment managers
and investors with challenges and opportunities for
the future.
October has held the reputation as the most
dangerous month of the year for investors. Last
Source: Yahoo! Inc.
month the markets were slightly lower, helping to
build confidence for both investors and consumers. A 6.5% drop in the West Texas Intermediate Crude
The S&P 500 Index (SPX) was 2% lower (see chart Futures (CL/X2), to a three month low, showed that
this Page) while the Dow Jones Industrial Average supplies were rising and demand was contracting for
(DJIA) fell 2.5% and the Nasdaq Composite Index energy, despite continued geopolitical tensions.
(COMPQ) sank 4.5%. Despite the general decline Agriculture prices continued to decline, but for
for stocks the DJ Transportation Average (DJTA) some, the rate of change has eased. This was very
jumped 3.9% evident for Corn and Pork Bellies. Soybean Oil was
Managers curtailed activity for the second down and Soybean Meal slightly higher. Cotton prices
straight month, analyzing and adjusting positions continue to contract.
ahead of the presidential elections. The expectation US Dollar and Interest Rates
for clear winning and losing sectors over the next few The US Dollar rose at the end of October and
years, dependant on the winner of the Whitehouse, the beginning of November, with the US Dollar Index
had managers strategizing while balancing against (DX/Y) climbing to the highest level in two months.
evidence of slowing economic conditions. Conversely the Euro/Dollar (EURDLR) dropped to its
Commodities Fall lowest level in two months. Also falling against the
Following rising prices in September, largely “Greenback” was the Japanese Yen, Canadian Dollar,
tied to concerns about the Euro zone, base metals and Swiss Franc.
gave up most if not all of those gains last month. Interest rates rose on a month/month basis. A
Gold dropped 2.9% month/month and 4.1% from the look at the Yield on the 10-year T-Note (TNX) shows
mid-month highs while the December futures con- that rates were up but ended the month in the middle
tract for Silver fell 6.5% month/month. This was par- of the monthly range after setting a lower high when
tially the result of lower inflationary pressures. compared to September. The chart on Page 2, First
Other metals, such as platinum and palladium Column illustrates this very well.
were also lower. High Grade Copper declined, a sign The higher dollar may be tied to a rise in con-
that industrial usage for commodities was also lower. sumer confidence. The Conference Board’s monthly
Another sign that economic growth and infla- Consumer Confidence Index (CBCCI) jumped for
tion are declining came from a drop in energy prices. the second consecutive month to the highest level in
more than four years (see chart Page 2, Column 2).
© Copyright 2012, Olympian Capital Management. All rights reserved.

2. CBOE 10-Year T-Note Yield (TNX) — Daily Chart HURRICANE SANDY
One of the worst storms to hit the United
States came ashore in New Jersey, playing a
Halloween punishment on the Northeast and Mid-
Atlantic states. Millions of people and businesses
were left without powers, thousands completely los-
ing their homes and places of employment. From
Main to California crews of electrical workers have
descended on the area to help rebuild the power grid
and help get the infrastructure up and running.
Nearly a week later businesses in the world’s
financial district continue piecing operations back
together while, at the same time, consumers search
Source: Yahoo! Inc.
out transportation alternatives as well as gasoline to
power their cars and generators.
EQUITIES, A DEEPER VIEW As businesses and people attempt to rebuild,
As we noted earlier, market activity continues demand for certain resources, products, and labor
to decline as uncertainty over the election and are expected to rise. This should provide some
economic growth challenges managers. Third opportunities for the near-term.
quarter earnings were mixed and many companies
lowered their forecasts for fourth quarter and 2013. WHAT TO WATCH FOR
As we noted last month, a warning from FedEx The major focus over the next several weeks
Corp. (FDX) indicated that shipments were declining, will likely be the election. As the choice of President
but rival UPS Corp. (UPS) reported better-than- (and policies) becomes clear, investment managers
expected results, which aided DJTA to a gain last will adjust their portfolios accordingly. Additionally,
month. the opportunities created from rebuilding in the storm
Among the strongest groups in October were ravaged region should also garner the attention of
coal & consumable fuels (+20.7%), household appli- profit seeking investors.
ances (+17.8%), trucking (+15.5%) automobile
manufacturing (+13.2%), and motorcycle manufac-
turing (+10.4%). The weakest groups included edu-
cational services (-30.9%), office electronics
(-12.3%), computer hardware (-11.1%), computer
storage & peripherals (-10.9%), and consumer elec-
tronics (-9.2%)
ECONOMIC RESULTS Consumer Confidence Index (CBCCI) — Monthly
For the second consecutive month the num-
ber of new jobs created exceeded expectations.
While the unemployment rate ticked higher to 7.9%
in October from 7.8% in September, the number of
private sector jobs increased 312,000 for the two
months while total non-farm payrolls rose 319,000
during that period.
An initial reading of Gross Domestic Product
(GDP) for the third quarter showed that the economy
rose at an anemic pace of 2.0%, which continues to
frustrate corporate CEO’s, government leaders, and
investment decision makers.
Source: The Conference Board
© Copyright 2012, Olympian Capital Management. All rights reserved.

3. Disclaimer
This commentary should not be construed by anyone as the rendering of personalized investment advice (or an
offer thereof) for compensation. This Commentary, and any information and research contained therein, does not
represent a recommendation of investment advice to buy or sell stocks or any financial instrument nor is it intended
as an endorsement of any security or investment. This Commentary is for informational purposes only and repre-
sents the writer’s or provider’s own investment opinions, and should not be construed as personalized investment
advice. Olympian cannot assess, verify, or guarantee the suitability of any particular investment to any personal
situation and the reader of this Commentary bears complete responsibility for its own investment research and
should seek the advice of a qualified investment and/or tax professional prior to making any investment decisions.
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© Copyright 2012, Olympian Capital Management. All rights reserved.