This week’s report is early and abbreviated because I’ll be spending the next couple of days talking to dentists at the Utah Dental Association’s annual seminar. I’m anticipating hearing some horror stories from dentists members of their office staffs who have seen their retirement accounts decline significantly over the past several weeks.

Fortunately, this week we’ve seen major indices recoup some of their lost ground. I anticipate there will be more follow through on this rally. I think the Dow is likely to climb back at least to the 13,000 area–about where it started the month–with other indices also climbing.

Today President Bush signed the economic stimulus bill and people should start seeing checks in May. Today investors also took encouragement from a Commerce Department report on January retail sales. The increase of 0.3% was a surprise to analysts who were expecting a decline of 0.3% to match that of December. In addition Treasury Secretary Henry Paulson today promised aggressive government action to help troubled homeowners. He said he believes the economy will continue on a path of growth.

The bottom line is that while there is plenty to be worried about, we’ve seen interest rate cuts and a number of other government actions designed to help the struggling economy. So far Wall Street’s reaction to these moves has been subdued. We’ve seen a significant correction over the past three months and cyclically and technically stocks are poised for a short-term rebound.

At this point investors need to remain cautious, but don’t be surprised to see stocks continue to rally over the short term.
F.S.

This entry was posted on Wednesday, February 13th, 2008 at 5:52 pm and is filed under Newsletter. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.