Friends
Well, today finished off a nice week with stocks up for the 5th day in a row. The Dow Jones Industrial Average was up 76 points and the S&P 500 was up almost 7 points to finish the day at 1216, up more than 5% for the week. After a difficult day yesterday, gold rallied back and was up $30 near the close, trading around the $1812 level. Oil slipped back down $1.40 per barrel to $88, and seems trapped in its range of $80 to $90.
You may be able to tell by our attitude toward the market advance this week that we are a tad skeptical. Don’t get me wrong, we love when stock prices rise, we are just a bit suspicious when stocks rise in a somewhat illogical manner. But when has logic ever had anything to do with stock prices? The fact is, many of the largest fund managers in the country are underinvested in stocks and this week’s advance could simply be attributed to the lack of sellers (light volume helps support this notion also).
On the economic front, the week was filled with what might not be considered disastrous numbers, but one would have trouble building a bullish case for the economy from the environment we find ourselves in. So why do stocks have a week like this? Well, we got a bit of a reprieve from the chaos in Europe this week, with the help of the U.S. and other central banks shoring up some large European banks (talk about don’t fight the Fed, how about don’t fight all the “Feds” around the world). That should give the Republican Presidential candidates some red meat for the next debate. Using taxpayer money to shore up crumbling European banks. Hmmm. Your serve Tea Party.
Anyway, we will see how Mr. Geithner does in Europe this weekend. The markets will surely react Monday to what comes out of the meeting of EU ministers and special guest Mr. Geithner in Poland. We’ll be strapped in Monday morning for what might prove to be another interesting week. In the meantime, we’ll enjoy the nice gains in stock prices for the week.
Have a nice weekend everyone.
