Higher markets on prospects Federal Reserve will keep interest rates low

Stocks started strong & continued higher. Dow was up 118, advancers over decliners 4-1 & NAZ gained 17. Banks are doing well (although slipping in the last hour). The Financial index is still at the low end of its trading range (190-210) for the last few months.


S&P 500 FINANCIALS INDEX

Value 192.48

Change 1.05

% Change 0.5%

High yield securities are strong again, benefiting from the rising stock market & implications of a quick economic recovery which will help solve problems. The Alerian MLP Index is up almost 2 to 256 & the REIT index is up 1.10 (also up 10 since Mon despite gloomy predictions about growing problems in commercial real estate). Junk bond funds are firmer. The VIX is recovering (declining), down 2 to the 26s, on reduced fears about the markets. The yield on the 10-year Treasury bond rose 2 basis points to 3,49%.

A special note, I've been following Joe's blog on MLPs:

http://limitedpartnerships.blogspot.com/

for 2 years and have learned a lot from his writings. It's been added to my Blogroll list on the right.

Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks




VIX --- 2 weeks





Commodities are doing well on a more favorable outlook for the recovery & gold has gone wild! Oil is back over 80. But gold had a 30+ gain yesterday & is strong today. Gold's gain yesterday was propelled after learning that India (not China which is the usual buyer) had bought 2 tons (I repeat TONS) of gold at market prices. 1100 is its next goal & that could be reached shortly, even later today. Gold is considered the inflation hedge & its strength has negative implications for the stock markets. For those who want to learn more about investing in gold, I have a link on "Trading Gold in 90 Seconds" from Ino.com in the column on the right->

CLZ09.NYM

...Crude Oil Dec 09

...80.70

... 1.10 .......(1.4%)

GCX09.CMX

...Gold Nov 09

...1,091.60

... 7.30 .......(0.7%)

Time Warner (TWX) reported lower earnings that beat expectations (the common theme in Q3 earnings reports), the stock rose 29¢. They also boosted guidance for 2009, said plans are still on track to spin off AOL & there will be more layoffs at Time.

• Time Warner 3Q profit drops, boosts outlook- AP

Time Warner --- 1 year





Yesterday was a quiet day, except for Warren Buffet's big purchase. That's the kind of news that warms the hears of buyers, hoping for more buyout stories. The Federal Reserve will announce the interest rates this PM. Expectations are that rates will continue very low for half a year at a minimum. But the FED will have to increase those rates, maybe by the end of next year if there is a strong recovery. Auto sales for Oct were fairly good, once again based on low expectations & off low prior figures. The jobs report on Fri is the next major event & that is dreaded!

Dow Jones Industrials --- 2 weeks