Click here for the Weekly Wrap by Briefing.com.
BOTTOM LINE: Overall, last week's market performance was positive. It was especially impressive considering the steep gains in commodity prices. The advance/decline line rose, most sectors gained and volume was average on the week. Measures of investor anxiety were mostly lower. The AAII % Bulls rose and is slightly above average levels. Mortgage rates rose for the first time in a month and are now 41 basis points away from all-time lows set in June 2003. Long-term Treasury yields were about unchanged for the week as much better inflation readings offset optimism for an acceleration of US economic activity. This optimism also led to outperformance by cyclical and commodity-related stocks. Homebuilders continued to shine on the strength of exceptional earnings from KB Home and strong housing data. I expect the recent rally in cyclicals and commodities to peak soon, while homebuilders should outperform through year-end. The US dollar fell on the week as traders took profits and the current account gap widened. I expect bit more short-term weakness in the currency before a resumption of the recent uptrend.
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