Here’s the summary:
Economically sensitive stocks launched today. Fed Chairman Bernanke came out and said that things looked good but could be better. The market interpreted that as:
The economy is growing
There is no need to stimulate further at the moment
They would like to see more job growth
This means that stocks are safe to buy, costs won’t rise too strongly, and that the Fed won’t depreciate the dollar too much.
Stocks rose, gold fell, bonds fell. Also due to the fact that 15 out of 19 banks passed some kind of Fed test (like they’d all fail) and JP Morgan and Goldman Sachs rushed to offer dividend increases and share buybacks, financial stocks led the market higher with Bank of America, JP Morgan and Goldman Sachs all up over 6%!
Gold took a hit as did gold stocks but buyers came in to keep many gold stocks at support levels. Long bonds broke through a downside channel and who knows where they and yields) will end up. Also worth watching is the falling Yen – free falling since February 1.
Plan of Action
Many of you, if you survived the ‘correction’ (I’ll admit I sold a little bit – weakness I know) then nothing likely would’ve caused you to sell by now and you’re sitting on decent gains. The market is telling up to keep riding the move.
I have some cash so I am looking at a few economically sensitive beneficiaries of rising markets, namely asset managers, for more exposure.
At the time of this writing, I or my clients own the following investments mentioned in this column: Gold
Note: this article is meant to be some helpful thoughts to share and not investment advice specific to you. Please consult your own advisor regarding investment and financial decisions. See our disclosures page