December 17, 2010

Market Wrap: for the week ending 17-Dec-2010

Weekly Snapshot
• US House passes the package extending the Bush tax cuts (AP)
• US leading indicators jump 1.1% in November, suggest economy will strengthen early in 2011 (AP)
• Moody's slashed Ireland's credit rating by five notches, to Baa1 from Aa2 (Reuters)
• General Electric expects its businesses to show solid earnings growth in 2011 (WSJ)
• US current account deficit increased to $127.2 billion, or 3.5% of GDP in Q3 of 2010 (ESA)
• Fed will maintain the target range for the federal funds rate at 0 to 1/4% (Federal Reserve)
• A federal judge ruled key part of Obama's healthcare overhaul as unconstitutional (WSJ)
• US factory output grew for the fifth straight month increasing 0.4% in November (AP)
• US retail sales in November 2010 were $378.7 billion, an increase of 0.8% from October (ESA)
• China's central bank left rates unchanged despite another jump in consumer inflation (Reuters)
• Chinese consumer prices rose 5.1% in November to a 2-year high, year-over-year growth at 9.6% (AP)

Market Barometers 

st-2010-12-17   fx-2010-12-17

Chart Of The Week
The 10-year Treasury peaked at 3.57% this week, the highest since May of this year. This could be the first sign of inflation slowly and finally creeping in on us. Higher rates for savers are still far off though and we sometimes forget what the current rates mean in historic perspective. Take a look at the chart below to get a a sense of what Bill Gross was hinting at when he predicted the end of a 3 decade long bull run in Bonds. 


Recommended Read 
As we are nearing the end of the year, the media tends to lock back at what has been.  Here’s a slightly abstract albeit rational look at a possible world 10 years from now.  Please consider: The shape of the world in 2020 

Recommended Video
Quite different from the doom & gloom that we usually get inundated with, here’s a really upbeat view of the world. Please consider this great video featuring Hans' Rosling’s unique view of the progress during the past 200 years.


Good luck and good investing!

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