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Strength of the Market
a weekly blog on what's happening in Financial Markets

The Strength of the Market is: Strong

Rising inflation, a jump of 5% from a year earlier, is no problem for this stock market. The S&P 500 ended the week at another record, up for a third straight week and the tech-heavy Nasdaq was up for a fourth straight week. Interest rates dropped to a 3-month low, giving stocks, especially technology stocks, a boost. Many tech companies rely on borrowed money for operations and expansion, so, when interest rates go down, it becomes less expensive to borrow - leading to the potential of better corporate profits and a bump up in their stock prices.

Economic reports from last week came back mixed:

•Consumer Credit - worse than expectation

•Small Business Optimism - worse than expectation

•Job Openings - better than expectation •Jobless Claims - worse than expectation •Consumer Sentiment - better than expectation

This week, investors will look for guidance from economic reports like Manufacturing, Housing and Jobless Claims.


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