The week that was:
US stocks closed higher for the third straight week and gold closed Friday at a record high of $1277.50 an ounce, with silver ending the session at a 30-year high.
While the stock market has performed well over the last few weeks, it still seems to be in a state of flux. We have crossed the 10,600 mark on the Dow a number of times in the last 12 months only to retreat again. My bet is that we will see 10,000 before long this time as well. The mediocre economic news of the last month wasn’t bad enough to push below Dow 10,000, and is not good enough to push us above current levels. Investors seem to be waiting for the upcoming earnings season to provide greater clarity. The double dip talk has subsided somewhat for now, but most of the major economic variables are still below levels prevailing 33 months ago (the official start of the recession). In a typical recovery, you would want to see these economic variables making new highs which leads me to be slightly bearish at the present time.
Stocks:
The S&P 500 rose 16.04 points this week, or 1.45%, to 1125.59. The Nasdaq Composite rose 73.13 points, or 3.26%, to 2315.61. The Dow Industrials rose 145.08 points, or 1.39%, to 10607.85. Tech stocks have led the charge of late as the Nasdaq is up 7.52% over the last three weeks.
- On Tuesday, Best Buy (BBY) reported a 2nd quarter earnings increase of 61%, though same-store sales declined 0.1%. Management updated the full-year outlook. The stock rose 7.4% on the news.
Bonds:
| End of week bond yields: |
| 2 Year yield = 0.46%, down 11 bps from last week. |
| 3 Year yield = 0.74%, down 14 bps from last week. |
| 5 Year yield = 1.44%, down 14 bps from last week. |
| 10 Year yield = 2.74%, down 5 bps from last week. |
| 30 Year yield = 3.90%, up 3 bps from last week. |
What to look for next week:
7:30 AM Tuesday Housing Starts
1:15 PM Tuesday FOMC Meeting Announcement
9:00 AM Thursday Existing Home Sales
7:30 AM Friday Durable Goods Orders
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