Monday, March 3, 2014
Financial Markets Recap for Last Week:
· The Dow Jones Industrial Average and the S&P 500 gained last week. The Nasdaq Composite extended its solid string of weekly advances to four, while the Russell 2000 finished its third consecutive week higher.
· The major indices all moved to multi – year highs. The only laggard is the Dow Jones Industrial Average, which is less than 2% below it’s high.
· Federal Reserve Chairwoman Janet Yellen gave her weather delayed testimony to the Senate Finance Committee. The unemployment rate metric of 6.5%, which had been stated as the metric that would be used for when to end the Federal Reserve’s bond buying program, has been removed and no metric will replace it according to Yellen.
· Lousy weather remains a convenient scapegoat for recent economic weakness, but it is very difficult to separate what is due to weather and what isn’t.
· It appears the gigantic oversupply of new homes has finally been reduced and the housing inventory is back to normal. This is quite positive for the housing industry and should also be quite beneficial for the economy going forward.
· Gold traded between $1300 -$1350 an ounce last week.
Financial Markets Health and Outlook:
· The fifth anniversary of a generational low for stocks comes on March 6. On that day back in 2009, the S&P 500 hit an intra-day low of 666.79. On Friday, the S&P 500 crossed above 1865 for the first time.
· The Federal Reserve remains on the side of investors. They will keep short-term interest rates extremely low for quite some time. (Repeated from last week).
· The strength of the stock market makes pullbacks in the market likely with greater frequency, but with less depth. (Repeated from last week). The new highs last week add to the bullish case for even higher highs in March.
· Some closely followed economic reports will be released this week. Most pundits are of the belief that the weather excuse has outlived its welcome.
· Gold recorded lows in June and December of 2013. The two low points are being viewed as significant from the standpoint if the metal stays above them, it is positive and could be indicating higher prices. If it falls below, another leg down is likely before gold could rally much further. The lows occurred near $1180 an ounce.
Sources: bankrate.com, bloomberg.com, briefing.com, Dow Jones News, Financial Times, finviz.com, Investor's Business Daily, marketwatch.com, seekingalpha.com, Thomson Reuters/First Call, U.S. Dept of Treasury, yahoo.com and individual company web sites and press releases.
Leonetti & Associates, LLC views or opinions are as of a certain date and subject to change without notice. The material contained herein is for informational purposes only and obtained from sources we consider reliable. We make no guarantee as to its accuracy or completeness. References to specific securities and industries/sectors should not be considered recommendations to buy or sell any security or advisory service. Past performance is not a guarantee of future results.