By Rick Glaze

The major indexes showed little change last week. Although the Nasdaq Composite rose 0.8 percent, the S&P 500 and the S&P 600 both fell 0.6 and 0.2 percent respectively.

Last week did see some positive signs as volume picked up sharply in upward trading. The higher volume does not mean there will be future market gains, but no major upward move has occurred in the past without this surge in volume.

Bond yields pulled back after soaring recently. Likewise, oil prices have dipped below $60 per barrel and gas is tracking well below $3 per gallon.

Alan Greenspan has become a monetary rock star while leading the Federal Reserve Board for many years. He announced his retirement earlier this year and Monday President Bush announced his nominee to replace the chairman.

Ben Bernanke is the choice and his Senate confirmation will be taking place shortly. He is a former Federal Reserve member and academic, well known in the tight circles of policy makers and economists. The move is important because the Federal Reserve, under Greenspan and former Chairman Paul Volker, has become a potent force in setting and administrating monetary policy and inflation control in an increasingly complex, global system. Bernanke has praised Greenspan and pledges continuity in direction, while stating that monetary policy will evolve. He has been quoted as saying, “Economics is like trying to fix a car while it is running.”

Why is this important to you? Subtle changes in policy can move massive amounts of capital around the world, affecting the ability of businesses and individuals to borrow. Astute observers know that a low interest rate and low inflation environment offers the best opportunity for a growing economy and growth means more jobs, payroll growth and tax revenue growth.

Rick Glaze is the president of Glaze Capital Management, Inc. of Los Altos and is a registered representative offering securities through First Allied Securities, Inc.