What a Week! A President’s Day Market Summary
Wall Street went into the long holiday weekend on a high note Friday, sending the blue chips to a 52 week high and within striking distance of 13,000. Investors are hoping that this President’s Day weekend will bring a deal to secure Greece’s debt burden. For those keeping count, it would be the second bailout for the country, what are the odds that a third round or default are inevitable. What a psychological mark crossing 13K would be, hell I was just graduating college back in the good old days! Granted, this zero rate environment has propped up equity markets, but corporate earnings have been very strong. The Dow Jones Industrial Average rose 45.79 points, or 0.4%, to 12,949.87. The S&P 500 Index gained 3.19 points, or 0.2%, to 1,361.23, with Consumer Discretionary rising the most among its 10 industry groups, while Health Care was the biggest negative contributor. The Nasdaq Composite was the only major average to close lower on the day, falling 8.07 points, or 0.3%, to 2,951.78. Despite the loss, the Nasdaq was still the best performer on the week. The blue chips finished with a weekly rise of 1.2%, while the S&P gained 1.4%, and the tech heavy Nasdaq jumped 1.7% on the week.
Gold declined $2.50, or 0.1%, to end at $1,725.90 an ounce, ending flat on the week. Oil for March delivery rose 93 cents, or 0.9%, to settle at $103.24 a barrel on the New York Mercantile Exchange, hitting a 9 month high for the front month contract.
The consumer price index rose 0.2 percent, following no change in each of the prior two months. January’s pace, however, was lower than consensus expectations for a 0.3 percent boost. Excluding food and energy, the CPI firmed to a 0.2 percent increase from December’s 0.1 percent increase. Analysts called for a 0.2 percent rise. Year-on-year, overall CPI inflation came in at 2.9 percent, compared to 3.0 percent in December. Clearly there are no signs of deflation. Currently, there is no clear backing for additional quantitative easing as growth has picked up, employment is rising, while the price level is stable.
The index of leading economic indicators saw a solid 0.4 percent gain in January following upwardly revised gain of 0.5 in December. Stimulative monetary policy, momentum in the manufacturing sector and a bullish stock market are three central strengths for the economic outlook. Will 1Q2012 bring us our first 3+% GDP reading in over 2 years?