Markets advance to new 2009 highs

Stocks are on a roll. Dow was up 29, advancers 3-1 ahead of decliners & NAZ gained 9, all to new 2009 highs. Banks are up, the Financial Index hit another high for the year (but still off the 500+ levels from a couple of years ago).

S&P 500 FINANCIALS INDEX

Value 201.96

Change 3.85

% Change 1.9%

The Alerian MLP Index was up 1 to 249 (252 is the 2009 high) & the Dow Jones REIT Index gained 3 to another 2009 high. Barclays Capital High Yield Bond ETF rose to an 11 month high. The 10-year Treasury bond yield was flat at 3.45%.

Alerian MLP Index --- 1 month




Dow Jones REIT Index --- 1 month




Barclays Capital Hi Yld Bd ETF - 1 year





Oil keeps kicking around 70 or about double its lows at the start of the year. High prices on oil will be felt by the rest of the economy. Gold is making 1K a new floor as the bulls want to take it higher. While stocks are at roughly 11 month highs, gold, a competitive investment, is at an all time high. Gold is the investment for the "risk averse" crowd.

CLV09.NYM

...Crude Oil Oct 09

...70.62

... 0.31 .......(0.4%)

GCU09.CMX

...Gold Sep 09

...1,017.20

... 12.20 .......(1.2%)

Output at US factories, mines & utilities rose 0.8% in Aug, economists expected a 0.6% increase. Last month's gain marked the 2nd straight increase after the global recession. This is a strong signal that the recession ended around Jul.

In addition, CPI rose 0.4% in Aug, after a flat reading in Jul (economists expected a 0.3% increase). Prices fell 1.5% in the last year, due to gas prices dropping sharply from record levels last summer. The core price index rose 0.1% (matching expectations) & rose 1.4% in the 12 months ending Aug, the smallest increase in more than 5 years. This is well within the FED's comfort zone indicating they face little pressure to raise interest rate.

Production in US Increased More Than Anticipated
•U.S. Consumer Prices Rise 0.4%, Underscoring Fed View Inflation Contained


David Simon, head of Simon Property (SPG), largest REIT, on Bloomberg TV, was optimistic about real estate & especially SPG. They are working their way thru the recession & looking for opportunities buying distressed properties (such as General Growth Property malls which is in Chapter II). In the meantime, their div has been slashed, helping them conserve money.

Simon Property May Buy Malls From General Growth

Simon Property --- 1 year





In the last month S&P 500 has had only 7 down days & has gained 5% to a new high for 2009. It's up 378 from its 682 low in Mar, an astounding 55% with nothing in the way to stop this freight train. Risk is embraced while caution is being thrown to the wind. It's hard to believe these gains well continue unchecked.

S&P 500 --- YTD




Dow Jones Industrials --- 1 month