The China Daily reported

December 3, 2010

Major market indices were mixed last week. The DJIA lost 1.00%, the S&P 500 increased 0.86%, and the Nasdaq rose 0.65%. Growth stocks outperformed value stocks. And the small cap index rose 1.16%. The 10-Treasury yield lost 0.17 basis points on the week, closing at 2.87%.
Last week saw equities take a breather from the primary uptrend. This is pretty typical. Stocks cannot just march into higher altitudes without pausing to draw some breath. Volume supply and demand indicate that the market's uptrend is still intact. While news out of Europe, a scandal in India, and saber rattling at the 30th parallel may make short-term sentiment a bit skittish, we still feel that this market has legs. But, as always, we remain cautious with our optimism.
The China Daily reported that China and Russia intend to drop the U.S. dollar for bilateral trade and use their own currencies for settlement. This represents a big announcement. It becomes a bigger deal if other Asian countries emulate them. What would you expect? With Geithner, Bernanke and company crowing of a strong-dollar policy, but doing everything in their power to weaken the dollar at every turn, at some point they lose credibility.
We can say that this is all part and parcel of geopolitics and global finance but that only goes so far. The benefit of having the keys to the printing press of the world's central currency is the ability to print more. In return, financial partners and clients around the world expect a bit of candor. When they don't get it, they are forced to become proactive. It's not too different from trade practices within any community in the world. You can hang a lowest prices sign in your windown. But if you don't offer them, what good is it?
Do what I say, not what I do worked for a while. But it does not make for sound long-term policy.
Economically, things are looking up. Labor markets are improving. Consumer spending is up. Global GDP is rising. The Conference Board's Leading Economic Indicators are up and business confidence is rising.
In the spirit of the holiday, we have a lot for which to be thankful. While the housing market, like your uncle Lou, lays on the coach in a boozy, post-meal tryptophan coma, the rest of the family is active and well. Stay tuned...

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