The Dow this week passed the psychological barrier of 12,000 on Thursday, a mark the Dow has never surpassed. As earnings season progressed it helped fuel the rally until Friday when disappointing numbers were released from Caterpillar.
This weeks snapshot
DJIA: Up 41.86 or 0.35%
S&P 500: Up 2.98 or 0.22%
NASDAQ: Down 14.99 or -0.64%
The Dow is now up 12% for the year helped by the recent rally that placed the index above 12,000. This has been a powerful week(s) for the overall market and in the near term there are really no signs of weakness. However, the continued worries of inflation, which are normal during this period of economic cycle are still prevalent. Worries about Federal Reserve interest rate increases have seem to fallen off, and it is plausible that by next summer we could see rate cuts.
Caterpillar on Friday released very disappointing numbers and fell roughly 15% on earnings below analysts expectations.
Crude oil has continued its slide closing down $1.75/barrel or down 2.99% for the week. This is even after OPEC producing countries agreed to slow output to try to stop the recent decline in oil prices. Important also is the fact that the dollar has been able to hold onto recent gains, which brings more confidence to the greenback.
Overall, we see the market as a difficult market to find value in given current prices. However, there are still opportunities, but one must be prudent and careful in their stock selections. Until next week have a productive and profitable week!