Sunday, December 05, 2004

Market Week in Review

S&P 500 1,191.17 +.72%

Click here for the Weekly Wrap by

Bottom Line: U.S. stocks finished moderately higher last week, led once again by small-cap and technology shares. The Russell 2000 made another ALL-TIME high and the Transport Index is nearing its historic high set in May 1999. As well, volume accelerated and advances outnumbered decliners by a healthy margin. In my opinion, energy prices have peaked for the intermediate-term and should lead the CRB Index lower next year, which bodes well for future inflation readings. I suspect Intel's positive commentary on inventories and raised guidance will be echoed many times by other tech companies over the next couple of months. The recent worries over consumer spending are likely overblown. Holiday retail sales should benefit from a recent 20% plunge in the average price of gasoline, an almost 20% gain in the average stock from August lows, incomes rising at a better rate and unemployment falling. Internet commerce is probably cannibalizing traditional retail sales more than is currently realized. Overall, this holiday shopping/travel season should be a good one.

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