By Clyde Noel
Stock Report
ook for stocks to trade a little higher this week because of improving corporate profits, military successes and consumers’ holiday buying. But don’t celebrate yet.
Many Wall Street pros think the bear market isn’t dead. Traders expect volatility and light volume this week because investors will head out of town for Thanksgiving. The stock market is closed on Thursday and shuts down Friday at 10 a.m. (PST).
However, the uptrend continued last week when the Dow Jones industrials rose 259 points or 2.7 percent, while the Nasdaq composite was up 70 points or 3.83 percent.
The Town Crier index rose 4.18 percent when four out of five stocks increased by the end of the week. Better-than-expected earnings from tech bellwethers like Hewlett-Packard helped brighten the outlook for technical issues.
For many stock-market investors, things are looking better and better. The Dow and the Nasdaq have chalked up gains six of the past eight weeks and the Nasdaq is up more than 30 percent since Sept. 21, the week following the attack on the United States.
Lots of investors say the market is still skittish over the possibility of more attacks on U.S. soil.
If attacks do occur, it could undermine consumer confidence and cause reduced spending to hurt corporate profits. Most traders agree there is one catalyst that could send stocks higher in the short term and that’s the capture of bin Laden.
We haven’t heard much about gold or silver lately. When trouble brews, gold becomes the asset of last resort because it is accepted as payment in many places in the world. Most of our parents and grandparents were strong believers in gold.
During previous wars, gold was considered the hard asset investors could depend on. Some financial advisors even suggested putting as much as 5 percent into gold or silver.
Times have changed since the price of gold peaked in 1980 at $850 an ounce. Last year, the price ranged between $264 and $312. Now, with a war on our hands, it’s trading at $280 an ounce. I don’t think we can call it a unit of value anymore.
Economic data will be light this week. Stats on October’s housing starts and weekly jobless claims are expected. A slew of retailers will report their quarterly results. Investors will look for indicators that revenues and profits are on track to improve next year.
Many large companies are reporting factory orders are declining and business inventories are shrinking. When they get low enough, then businesses will crank up production and that means hiring more workers.
There are signs a new bull market has arrived, but before a new bull starts snorting fire, stocks might fall sharply again. It’s what you call retesting the recent lows.
Noel, a seasoned investor, covers the stock market for the Town Crier.
