The Week That Was---6/11-6/15
THE MARKETS
Friday the Nasdaq hit a new high for the year. (I certainly liked all the green arrows in my online portfolio.) Friday's broad gains with higher volume suggested the rally is back on track. Higher volume usually indicates institutional buying which is necessary for a rally to keep going. (Money managers, please just keep it coming. However, I suppose you will be going on vacation sometime within the next couple months.)
THE RETAIL SALES
The all important retail sales jumped 1.4% in May (double what economists had predicted). The increase was an "Oh, Wow" event---it was the best monthly gain since January 2006. Among others, sales increased for gasoline, cars, building materials, and electronics. (We bought a new TIVO.) Now economists have decided the economy may be rebounding---at least from a poor first quarter in 2007.
THE ECONOMY
This week was a "tame inflation" week. (In other words the sun was shining. What will the inflation weather be next week?) The core CPI was up more than the Fed's comfort zone, but it increased less than it has in 14 months so the Fed was happy. (Go figure that.) Yet, the overall CPI gain (0.7%) was the largest since September 2005. (So what is it that makes the Fed happy?)
On the other hand, the consumer happiness barometer was down. The consumer sentiment index was the lowest it has been in 10 months. Has anyone else, other than we consumers, noticed that the price of gasoline has been above $3 for the third straight week.
FUNDING THE DEBT
I thought this was interesting. Every day the U.S. needs to sell nearly $2 billion in U.S. Treasuries to help cover the deficit. (And I worry about my credit card debt.) International investors keep you money coming! They did in April. They invested long-term $84.1 billion more than they took out. That is $32.9 billion more than in March.
Thank you IBD for good reading.
8:41:23 PM 
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