US stock investors will be pleased to learn that the S&P 500 has been up 7 of the last 8 weeks.  They will take great joy in finding out that advancing stocks have exceeded declining stocks on the New York Stock Exchange for the last 10 consecutive weeks.  The S&P 500's +7.8% YTD gain (total return) through last Friday (10/22/10) is a welcomed sight for Americans that have experienced a roller-coaster ride with our economy during the last 2 years.  But exactly what is driving stock values higher?  Certainly the bottom-line profits of US corporations have rebounded significantly in the last 12 months.  Possibly the market has priced in anticipated changes in the political landscape in Washington from the mid-term elections that are now just over a week away.  Maybe it's the next round of monetary policy by Ben Bernanke's Fed that could be announced as soon as early November.  Whatever the source of the gains, equity investors are simply hoping the good times continue (source: BTN Research). 

The US would need to import less and export more to reverse its trade imbalance.  The US believes that China, Japan and Germany need to implement trade policies that would accomplish just the opposite (i.e., import more and export less).  At a global summit of world finance ministers over the weekend in South Korea, Treasury Secretary Tim Geithner released a trade proposal that was immediately met with opposition, raising an already high level of international tension (source: Financial Times).