Friday, January 25, 2008
To say the least, we invest and trade in interesting times.
This week was remarkable in many ways and it will be some time before we are to fully understand its significance. From fear to greed (often within minutes of each other), the market displayed a manic depressive state one that left many investors and their portfolios in disarray. Much like its participants, the market is confused and desperately searching for answers.
For the week, the Dow gained +2.3%, the S&P 500 +0.4%, Nasdaq -0.6%, and the Russell 2000 +2.9%. Year-to-date, the Dow is now down -7.9%, the S&P 500 -9.4%, Nasdaq -12.3%, and the Russell 2000 -10.1%.
Along with mucho distractions galore from the Fed, rogue traders, more poor economic data, massive short-squeezes, and ever-present bottom calling/hoping from the media, earnings arrived this week and they're not half bad. Like the market, many executives are expressing some elevated concerns about the economy, but are still hoping for the best. The same is true with most market participants.
Next week we will have a steady dose of economic data (home sales, durable goods, GDP, jobs), and enough Fedspeak to make your head spin on top of the President's State of the Union address. We also have a ton of earnings to sort through. Whether we hold this week's bounce or make new lows will depend on all of the above. Get plenty of rest this weekend - you are going to need it for next week.