As you’ll recall, the Dow Jones Industrial Average sobered up and retreated Monday, but it spent the rest of the week serving skunked beer: market news and a largely unchanged index level.
What a bender- or hangover. The Dow Jones Industrial Average kicked off the week at 9,341.73 points Monday. The index reached a high of 9,421.31 Wednesday, and a weekly low of 9,221.19 points Tuesday. The market ended the week at 9,321.40 points, just 20.33 points down from Monday’s open level.
Spurring the Monday blues was the thorough examination of Friday’s euphoric jobs report, which revealed the lower unemployment numbers were driven by a mass exodus of people from the labor force rather than a significant turnaround in jobs losses.
In case you missed it, THE RECESSION IS OVER! Tuesday, The Wall Street Journal survey of 47 economists showed that the recession that began in December 2007 is finally at an end. The money minds expect US GDP to grow 2.4% in the third quarter, a welcome change from months of dour news. The economists are siting a modest recovery in manufacturing as one positive indication the economy is lumbering back on track.
Talking-head economists also largely agreed that Federal Reserve Chairman Ben Bernanke’s performance throughout the economic crisis that marked his four year term is worthy of granting him a second term. Mr. Bernanke’s appointment is due to end on December 31, and it remains unclear whether the Obama administration plans to reappoint the chairman or come up with a fanatical Socialist tyrant euthanasia expert to govern monetary policy. (Just kidding.)
If Bernanke is heading back to academia, he’s doing so with legacy intact. Wednesday the Federal Open Market Committee agreed that the recession is ending, and announced they will hold interest rates steady. Despite interest rates futures market pricing in likely rate hikes in the first quarter of 2010, the FOMC reiterated plans to keep rates at historic lows as a means of encouraging economic recovery. The Fed funds rate will stay in the 0 to 25 basis point range, with most economists expecting interest rates to remain there for the next 12 months, according to Market Watch.
Monthly retail sales data inspired new concerns over US economy Thursday. July retail sales posted an unexpected drop, revealing an anemic US consumer interest and prompting worries that cautious consumers will slow the recovery. Which means we could well be facing an up-and-down Dow for the rest of the summer.
