Market Report – November 21, 2011

Filed under: Investor Blogs |

In the Rear View Mirror:  Every major index that we follow took a beating last week with only the Dow and Amex staying in positive territory on a year-to-date basis.

Regarding the European Debt Crisis, which remains front and center news…we found some interesting comments, and one from Yahoo Finance really zeros in on the heart of the matter:

“This European debt crisis is easy to explain. It’s like if the United States merged with South America… 99% of the productivity would come from the USA and Brazil (hence Germany and France) and the rest of the countries would be a bunch of revenue sucking leeches.”

OK…now I understand it!!!

On a positive note…The Conference Board’s leading economic indicators climbed more than forecast in October, a possible indication the US economy could continue growing over the next few months and into early 2012.

The Markets @ 11/18/2011
Index Close Weekly % Change YTD Change YTD%
DJIA 11796.16 -357.52 -2.94% 218.65 1.89%
NASDAQ 2572.5 -106.25 -3.97% -80.37 -3.03%
S&P 500 1215.65 -48.2 -3.81% -41.99 -3.34%
NYSE Comp 7282.47 -293.71 -3.88% -681.55 -8.56%
NYSE Amex 2240.87 -64.81 -2.81% 32.49 1.47%
RUS 2000 719.42 -25.22 -3.39% -64.23 -8.20%
VANG INTL 13.45 -0.64 -4.54% -2.31 -14.66%
USX CHINA 4826.53 -252.08 -4.96% -1261.34 -20.72%

Market Report

The USX China Index led the downward move with a 4.96% loss for the week (off 20.72% YTD), closely followed by the Vanguard Index at -4.54% (off 14.66% YTD).

All the other major indices flashed big red numbers at Friday’s close.

Crude Oil gave a little back for the week too (down 1.58, closing at $97.41); Gold was -62.80, closing at $1.724.70; the dollar was up slightly… +0.0121 or 0.7394 euros; the 10-year bond gained 0.391 to $99.875 and the 30-year bond was up as well at +2.665 to $102.563.

The Bottom Line for Stocks…”

In the short term, if the Congressional Deficit-cutting Committee doesn’t do their job, which looks increasingly more likely than not, we could see further erosion in the markets. The bipartisan panel is likely to “kick the can down the road” and let the automatic spending cuts take effect in 2013, thus avoiding short-term political fallout from not holding the party line.

For the longer term, there is an increasing amount of evidence that suggest all the artificial stimulation (read that as printing more money) will soon trigger rising inflation. In that case, inflationary pressure and cost-of-living spikes could erode some portfolios. Bonds will be vulnerable to rising interest rates and stocks will be the beneficiary.

Research and Editorial Staff
MicroCap MarkePlace