THE MARKETS
When Fed Chairman Ben Bernanke speaks, people listen.
The normally secretive Federal Reserve held its first-ever news conference last week and what Bernanke said turned out to be music to the market's ears. Here are some of his key comments:
· The Fed will end its current $600 billion bond-buying program (QE2) in June (no surprise).
· It will continue to reinvest the proceeds of maturing securities (a sign of continuing the easy money policy).
· It will maintain its exceptionally low target for federal funds for an extended period (another sign of continuing the easy money policy).
Source: Barron's
The markets seemed to like what they heard. Stocks, bonds, and commodities generally rose on the week. In fact, this latest round of bond-buying by the Fed -- the so-called QE2 -- has helped push the stock market up dramatically. According to an April 30 Barron's article, the Wilshire 5000, the broadest measure of the U.S. equity market, has risen and increased the wealth of stockholders by about $4.1 trillion, or 32%, since last August 26, 2010, the day before Bernanke floated the idea of additional Treasury purchases (QE2) at a speech in Jackson Hole, WY.
There was other positive news last week, too.
· The Dow Jones Industrial Average and the S&P 500 closed at their highest level since mid-2008.
· The Russell 2000 Index of small cap stocks and the Dow Jones Transportation Index both hit all-time highs.
· Thomson Reuters reported that of the 323 companies in the S&P 500 that reported earnings as of last Thursday, 73% beat earnings estimates.
· Gold prices hit another all-time high and silver prices rose 28% in April -- a monthly record.
Source: CNBC
But, all that good news aside, for some, the best news of the week was the spectacular wedding of William and Kate.
Data as of 4/29/11 |
1-Week |
Y-T-D |
1-Year |
3-Year |
5-Year |
10-Year |
|
Standard & Poor's 500 (Domestic Stocks) |
2.0% |
8.4% |
14.9% |
-0.7% |
0.9% |
0.9% |
|
DJ Global ex US (Foreign Stocks) |
1.5 |
7.1 |
17.6 |
-3.0 |
1.1 |
5.3 |
|
10-year Treasury Note (Yield Only) |
3.3 |
N/A |
3.7 |
3.8 |
5.1 |
5.3 |
|
Gold (per ounce) |
3.5 |
10.3 |
33.4 |
20.9 |
18.7 |
19.4 |
|
DJ-UBS Commodity Index |
0.7 |
8.0 |
31.4 |
-5.7 |
-0.3 |
4.9 |
|
DJ Equity All REIT TR Index |
3.0 |
12.2 |
18.0 |
1.8 |
3.5 |
11.8 |
Notes: S&P 500, DJ Global ex US, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron's, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable or not available.
