Last Week in Brief: June 20

June 20, 2014

Financial markets rallied last week, even as geopolitics continued to destabilize.
ISIS erased 13 years of American treasure, effort, resources and all the young lives lost in Iraq. Northward, Russian troops amassed at the Ukrainian border. And in the U.S., Yellen underscored the Fed's commitment to stimulus as our allies in Europe did similarly.
The Good
Homebuilder sentiment was higher, though below bullish standards... Investor sentiment went negative - which is a contrarian positive...  Leading indicators met expectations... Industrial production beat expectations... And commercial credit, at long last, is rising.
The Bad
Oil and gas prices spiked higher due to ongoing violence in Iraq... Confidence in Congress and The White House hit new lows... Americans went further into debt to pay for basic necessities... Container ship traffic was down, portending slowing economies... Building permits and housing starts were very weak -- despite the rebound in builder sentiment.
The Ugly
We have long lamented the overreaching practices of the Federal government. Yet, we continue to be not-so-pleasantly surprised. The VA. IRS. Border Patrol. Bureau of Economic Analysis. NASA. The NSA. The US Patent and Trademark Office. All created to perform a focused, narrowly defined task in support of the administration of the nation. Each fulfilling a role in the nation's division of labor. No longer. Today, it seems that each of these Federal administrative agencies has morphed into hyper politically correct stewards of the nation's cultural and business enterprise. Or, in the NSA's case, worse. For an excellent overview of the Federal government's attempts to transcend its traditional roles and responsibilities, read this.
 Weekly Results
Major markets finished higher last week. The DJIA rose 1.02%, the S&P 500 gained 1.38%, and the Nasdaq climbed 1.33%.  Small cap stocks jumped 2.21%.  And the 10-year Treasury bond yield was unchanged at 2.61%. Gold gained $37.96 per ounce, or 2.97%.

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