Good Week for Investors, So Far
Perhaps there should be a Monday holiday whenever the stock markets get into a downward trend because in just two days of trading this week, most financial indicators are reporting gains.
Everything from stock markets to commodities to currencies are all showing growth this week after heading down in value last week. By the close of trading on Wednesday, the Dow Jones Industrial Average was in the positive column and it was the second day in a row. That's a first since mid-June.
In fact, stocks worldwide surged after reports that retail sales in the US grew at the fastest pace in four years, according to BusinessWeek. Also on the rise, the beleaguered euro gained value after weeks of uncertainty caused mainly by the lousy Greek economy.
This news is a wake-up amid the typical summer doldrums the financial sector experiences. However, these doldrums had turned to doomsday lately as some analysts speculated as recently as Tuesday that a double-dip recession was coming. The most significant indicators recently that a double-dip may be forming came in the lackluster jobs and unemployment reports. Those dreary figures cast a funk over Wall Street for most of last week. On top of that, Congress declined to extend jobless benefits for a second time last week, leaving many unemployed without an income.
But it appears that an extra-long weekend, thanks to the Independence Day holiday, was a re-boot for many investors, and they've started to head back into "buy" mode.
The downside for consumers, however, is that the cost of crude oil is increasing. Should the increases continue, the sale of oil futures on the New York and London commodities markets will boost the price of gasoline at the pump.
Now the real measure of this upswing will be whether it carries into next week. Otherwise, the recent increases could just be the result of bargain hunters looking to take advantage of depressed prices.
With the Dow closing above 10,000 today, its ability to stay above that ceiling in the next few days will determine if this is truly the sign of the recovery finally gaining momentum.
No one expects boom times, but many are wondering when the national unemployment levels will stop flirting with 10 percent, and when consumers will start spending regularly again. That will, in turn, trigger an increase in wholesale goods orders, which will drive the manufacturing sector to start producing more. That will be key to the recovery, because despite buying incentives such as "Cash for Clunkers" and the recent rebates on EnergyStar appliances, consumers have held off buying otherwise.
Follow Technorati