Daily Investment Interpretations

August 21, 2009

2009-8-21:  The markets galloped to new highs today.  The NASDAQ Composite advanced 31.68 points (1.59%) to close at 2.020.90, the Dow closed up 155.91 points (1.67%) to settle at 9,505.96 and the S&P 500 added 18.76 points (1.86%) to end the week at 1,026.13. Oil closed at $72.35 a barrel, while gold fell $13 to $955. The VIX declined ever so slightly to 25.01.
    There was exceptionally good news today. Existing-home sales have now risen for four months in a row, with last month's sales at a two-year high. Also, Fed Chairman Bernanke said today that the Fed and other central banks saved the world from "devastation". Meanwhile, unemployment levels continue to rise; Paul Krugman points out that the last several recessions have had "jobless" recoveries in which it can take two years before employment rates pick up substantially: Permanent Link to The answer is yes.
    Of course, the question is always, "What happens next?", but in this news-driven market environment, perhaps we're at the mercy of what the news will bring. Longer-term, though, there now seems to me to be general agreement among leading economists that a recovery is on its way.