Another good week on Wall Street as all major markets posted solid gains. The Dow crossed 10,300 on Tuesday, hitting a new high for the year. It closed the week off that high, yet still up 2.46% for the week. The Nasdaq was up 2.62% and the S&P was up 2.26 percent.
Commodities closed the week mostly lower. Oil continues to drop as inventories continue to grow. One area that did show improvement for the week was gold. Gold closed the week at $1,116 an ounce, marking a new high and continuing its upward trend. Up until recently, oil and gold moved in tandem, based on the direction of the dollar. As you can see, this trend may be ending. We don't see it having much impact on the markets, but it is still interesting to note.
Making news this week was the widening trade deficit. Both exports and imports rose, however. The increase in imports is due largely to a higher-priced barrel of crude oil, as well as an increase in auto imports due to the depletion from the cash-for-clunkers program. The increase in exports is due largely to a weak dollar, yet it indicates other areas of the globe are still growing strongly.
Next week is full of news that will impact the market. Retail sales will be released on Monday, Producer Price Index (PPI) on Tuesday, Consumer Price Index (CPI) on Wednesday, Leading Economic Indicators on Thursday, and state jobs reports on Friday. All releases are expected to be lower than their previous releases, with the exception of Retail sales. These releases will likely increase volatility in the markets. Options also expire this week, which will add to the volatility.
Where are we investing now?
We continue to buy equities on the market pullbacks, especially multi-nationals. The cash on the sidelines will continue to push the market higher. We are still bullish (positive) on commodities as the dollar slides further lower. We are also putting some money in TIPs, expecting inflation to increase in the future. We are looking at putting more money internationally, as emerging markets (excluding
