Friends
After a few days of weakness in bonds and gold, both held firm today as stocks continue to fight their way higher. Even without the crutch of Apple (which actually went down a little today after touching $600 per share at the open) stocks were able to advance. For the day, the Dow Jones Industrial Average was up 58 points to close at 13,252. This is the seventh day in a row the Dow has risen. The S&P 500 was up 8 to close at 1402. This is the first close over 1400 since 2008 for the S&P 500. Gold bounced a little after being shelled this week with the precious metal rising $15 to trade near $1658. Oil finished the day nearly unchanged at $105.31, after having been down earlier in the day when rumors that the British and U. S. had agreed to a Strategic Petroleum Reserve release (which later was denied).
On the economic front, the PPI number was as expected and the weekly jobless claim number was good. We will get the CPI number tomorrow, but traders do not seem to be too focused on inflation at the moment. For now, the economy seems to be on the slow road to recovery and stocks (rising) and bonds (falling) seem to be confirming the direction. Will there be bumps ahead? Of course, but we have Dr. Bernanke ready and willing to fill up the punch bowl at a moment’s notice.
In a few weeks, traders will once again focus on earnings (which we feel could be challenged considering the rising dollar and input costs), but for now momentum is to the upside for stocks. The key to a long term move will be if we can get the individual off the sidelines, where he has been happy to get 0% and negative real returns. Will the lure of rising stock prices bring back those who swore they would never buy another stock? Time will tell.
Have a nice evening everyone.
