Monday, May 08, 2006

Weekly Review (5/1/06 – 5/5/06)

Fed meeting, Interest rate

For the week, the Dow surged 1.85 percent, the Standard & Poor's 500 index gained 1.16 percent and the NASDAQ climbed 0.86 percent.

The economic data helped the Dow reached a 6 years new high. With the high price of gold and oil, the movement is very impressive. Meanwhile, the NASDAQ just had a “mild return”.

The coming week won’t have much economic data released, but the Fed rate meeting. The Fed meeting will be hold on Wednesday. It will announce its decision at 2:15 PM.

A lot of people have thought the Fed will add another quarter point already. If the Fed would not increase the rate, then it will be a big surprise, and the market will be over whelmed. Otherwise, the market will not be stirred much by the Fed decision.

If you notice the change of the past month (4/6 to 5/5), you would see that the Dow has increased 361.24 or 3.22%; but the NASDAQ has decreased 18.6 or -0.79%. A bull market has a general rule, which is NASDAQ should run faster than the Dow. Now what we have seen is the opposite. It makes me a little bit uncomfortable about the market movement.

Because their different, the NASDAQ still has the need to go up; for the Dow, I am not sure still.

The oil is the uncertain factor still. If the oil price increased on Thursday or Friday, we should see some impact on the stock market.

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