Final Update/ Week of January 25, 2010

Good Afternoon Everyone and Happy Friday! Boy, what a busy day today is in financial markets. First of all from yesterday’s news page, Ben Bernanke is confirmed as the head of the Fed for another 4 year term. This is seen as a move to keep markets on the right track, and keep things calm. Ben Bernanke is viewed as a stand out in his own field especially as an expert in his studies on the Great Depression and how to deal with this recession. There were 30 Senators who apparently didn’t feel that way, but he’s confirmed and on board for another 4.

The market should be skyrocketing today with the very impressive GDP reading for the 4th quarter of 2009. Of course, this is based on an almost dead economy the quarters previous, but certainly the heart of the economy (the consumer) is beginning to beat once again. GDP for Q4 ’09 came in at a rise of 5.7%, besting the 4.7% anticipated by the experts. Much of the spending is a result of government stimulus, so may experts are leery that this level is sustainable, but wow, what a number! Last quarter’s number (Q3) showed a rise of 2.2% . . . this after 4 quarters of negative growth. There’s lots more to read about in this report and it’s worth the read. The graphic on the GDP for the last 5 quarters is truly amazing.

Good earnings reports from Microsoft and Honeywell should have propelled the stock market even higher, too. The Univ. of Michigan’s consumer sentiment survey showed a rise to 74.4 . . . higher than the 73.0 reading anticipated. So why isn’t the stock market sky rocketing? Well, I think traders realize that the GDP number, although stellar, is artificial in light of the fact that the gov’t had to put so much money into the economy to get that number. Obviously, we can’t keep doing that. Many financial pundits feel that the market was over sold in the first place and doesn’t really make sense for it to keep growing without a correction.

Credit markets remain flat again today. All week we’ve pretty much stayed within .25 to .375 in rebate with no major breakthroughs. . . . so we did see some improvement in our world in January.

I will be on the road all day today. Please call or email me if I can help you . . . and have a terrific Friday and a very restful and relaxing weekend!