Stock Market Update -Aug 2nd

The market was up again this week, helped by a better than expected GDP report, though sector performance was mixed (see chart below). Many are expecting a pause or pullback near this level, though the bears continue to be disappointed throughout this rally!

New unemployment claims fell below 600,000 again, this time at 584,000, and five more banks were shut down by regulators (list). -big Texas bank on verge of failure.

Commodities: Oil prices rallied further to just over $69 per barrel. Gold closed the week around $954, while the US Dollar was down to the low point for the year.

Bond prices were up for the week as the stock rally seemed to pause. The huge treasury auctions this past week were somewhat disappointing, possibly indicating less willingness to continue to loan hundreds of billions to the US.

Next week we get more earnings reports for the quarter, along with the all important monthly payroll and unemployment report on Friday. On a side note, Citi shares have been trading huge volume this week of over 1 billion shares daily!

Market analysis: The rally continues, though it could be starting to lose some steam. We closed out July with a very strong gain, the best performance in 20 years for the DOW. There is no clear direction for the week ahead, though my bias would be for a pullback. We saw a big drop in the Shanghai market this week, possibly indicating some more weakness ahead in the China market.

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