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The Markets
 Last
week, higher oil prices, inflation concerns, and worries about
high risk segments of the mortgage
market worried
investors.
Oil finished at its highest price for the year on Friday
on concerns that Iran, OPEC's second largest supplier, is
refusing
to suspend its uranium enrichment program, according to
Yahoo! Finance. Inflation fears were rekindled by a report
that consumer
prices rose faster than expected in January. And, mortgage
customers with lower credit scores have been falling behind
or defaulting on loans, creating concern that the effects
of the housing bubble may not yet be fully realized. Commodities,
namely gold, soared this week behind higher than expected
CPI numbers and fund flows out of the bond market. Gold market
bulls were pleased with the yellow fellow's close over
$675.
Investors
also may be on edge because some experts think this bull
market is ready for a correction. A correction is
a decline of 10% to 20%. One industry analyst reported in
the Economist that the American stock market has sustained
its longest run since 1954 without a day's decline of 2%.
This is unusual because bull markets usually stumble through
several corrections. The current bull market, which began
in October of 2002, swerved a bit during the spring/summer
of 2006 but that's it. Why hasn't this bull
market corrected? According to USA Today, this slow charging
bull
market has posted gains at a slower pace than many previous
bull markets. In fact, by some measures, it's the
third worst bull market since 1932.
| Returns through 02/23/07 |
1-Week |
Y-T-D |
1-Year |
3-Year |
5-Year |
10-Year |
| Dow Jones Industrials |
-0.9 |
1.5 |
14.3 |
6.0 |
4.5 |
6.1 |
| Nasdaq Composite |
0.8 |
4.1 |
10.0 |
7.8 |
7.3 |
6.5 |
| Standard & Poor's
500 |
-0.3 |
2.3 |
12.6 |
8.3 |
5.5 |
6.0 |
Source: Yahoo! Finance, Barrons
Past performance is no guarantee of future results. Indices
are unmanaged and cannot be invested into directly.
Three-,
5-, and 10-year returns are annualized. Assumes dividends are
not reinvested.
GREENSPAN SAYS THE "R" WORD
Alan Greenspan
by Miss Erin Crowe. |
Today, former U.S. Federal
Reserve Chairman Alan Greenspan warned that the American
economy might slip into recession by year's end. He
said the U.S. economy has been expanding since 2001 and
that there are signs the current economic cycle is coming
to an end. "When you get this far away from a recession
invariably forces build up for the next recession, and
indeed we are beginning to see that sign," Greenspan
said via satellite link to a business conference in Hong
Kong. |
"What the wise man
does at the beginning [of a rising market] the fool does
at the end. Once a price history [rising market] develops
enough for other people to see it and get envious, greed
takes over markets. We simply attempt to be fearful when
others are greedy, and greedy when others are fearful." -Warren
Buffet
AN INVESTOR'S EMOTIONAL CYCLE - Where do you think
we are?
Question: What countries are the top two
suppliers of crude oil to the United States?
Answer: Canada is the largest provider of oil to the US at
77, 941 barrels per day. Mexico is second, at 47,523. Saudi
Arabia is thrid and Venezuela is fourth.
Best Regards,
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