By Rick Glaze

The year-end rally in stocks continued last week, bringing the S&P 500 up 5.1 percent this month, recovering from a steep slide in October. All S&P groups were up, as was oil, which closed at $58.71 per barrel. The S&P 500 and the Nasdaq were both up 1.6 percent for the week, while the Dow gained 1.5 and the Russell 2000 advanced 1.7 percent.

The Federal Reserve Board is responsible for fixing short-term interest rates and other monetary policy. Recent statements from the Fed showed investors some light at the end of the tightening tunnel. Many believe that short rates may have peaked. The Fed uses its tools to combat future inflation, but responding to productivity gains and global competition dictates part of the Fed’s strategy. Technology is still flooding industrial America, helping each worker achieve more, resulting in a more competitive economy.

The U.S. economy continues to show signs of strength despite energy spikes, hurricanes and multiple interest-rate increases. When looking for telltale signs of economic recovery and health, one can note that orders for luxury boats are reportedly booming.

Why is that important? The price tag for these boats is $80,000 to $300,000. Thus business must be going very well before you buy one - an anecdotal indicator of economic growth and prosperity.

Looking even deeper, reports indicate that some insurance companies are issuing record numbers of group employee benefit packages for disability, accident and other coverage to small companies.

Such an increase is a sign of new business formation. Because small companies employ 80 percent of U.S. workers, the numbers are also a sign of future job growth.

The employment rate also factors into any reading of the economy. The Labor Department compiles employment figures, but perhaps a more pertinent statistic is household employment data.

The household employment survey picks up self-employed and other startup employment figures that take years to be factored into Labor Department numbers. The household survey of employment has been running well above Labor’s numbers and clearly points to a stronger economy than most people think.

Readers who would like a specific financial topic addressed in this column may write the editor or e-mail bruce@latc.com.

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