Friends
Stocks had an upward bias today right from the start despite an awful consumer confidence number (is it any surprise that consumers would be cautious given the circus they have been exposed to over the past 30 days?). The Dow Jones Industrial Average was up about 180 points by midday but calmly settled back to finish the day up 126 points at 11,269. The S&P 500 closed the day at 1178 after closing last week right at 1200. Earlier in the week, the S&P traded down as low as 1100, so you can see the unbelievable amount of volatility. Gold was down just slightly near the $1747 area and oil ended the week just above $85 per barrel.
What do we take away from this unbelievable week? First, we saw real fear for the first time in a while, as early in the week investors just seemed to want out at any price. Of course, just when the fear seemed the worst, we got the not unexpected snap back rally on Tuesday. The rest of the week was somewhat of a tug-of-war between the bulls and the bears, with both keeping a close eye on the goings on in Europe. It seemed like exhaustion simply set in by this afternoon, as traders seemed to just want to get away for the weekend and energize their batteries for next week.
We continue to be inclined to look for good dividend paying stocks to pick up on the down days, as we learned that the Fed intends to keep interest rates very low for quite some time to come. By comparison, great U. S. Corporations with solid balance sheets and juicy dividends stack up well to the debt of sovereign nations.
We’ll be ready for lots of news next week that is sure to come from Europe, and possibly a jobs proposal from the White House. Remember, the key is to have a plan, be prepared and stay calm. We prepared for a summer of sloppy stock prices and now we can take advantage of the volatility.
Have a nice weekend everyone. Try to stay cool.
