Wall Street built a head of steam over the past week as it moved toward the holiday season, giving many investors reason to be optimistic in what has traditionally a strong period of the year.
Two of Wall Street's three main indexes rallied to four-and-a-half-year highs and some analysts say there is room for more growth because stocks remain relatively undervalued following a long period of market stagnation.
Over the past week, the Dow Jones Industrial Average gained 0.75 percent to 10,766.33, nearly battling back to its starting point on Jan. 1 of 10,783.01.
The broad-market Standard and Poor's 500 advanced 1.09 percent for the week to 1,248.27 -- its best level since June 2001. The tech-heavy NASDAQ has also hit a fresh four-and-a-half-year high, rising 1.12 percent for the week to 2,227.07.
The markets have seen four solid weeks and many say it could gain further from seasonal momentum along with a solid economic backdrop.
"Overall, the economy is slowing, but to a healthy and sustainable rate," Al Goldman at AG Edwards said.
"This should encourage the Federal Reserve board to stop the rate hike cycle by the spring at about 4.5 percent. If investors start to anticipate the Fed stopping rate hikes, the stock market would hold a party. Meanwhile, the seasonal year-end rally remains in place and trading accounts should be or get so positioned," Goldman said.
Douglas Porter, deputy chief economist at BMO Nesbitt Burns, said the US stock market has "woefully underperformed" most other global markets since early last year, and thus remains relatively inexpensive.
"The lackluster performance of US equities over the past two years, at a time of robust earnings growth, has helped improved valuation metrics markedly," Porter said.
"Our equity valuation model, which is a modification of the Fed model, suggests that the S&P 500 is currently undervalued by roughly 25 percent," he said.
Robert DiClemente at Citigroup said the US economic picture remains solid despite hurricanes Rita and Katrina.
"A full slate of economic data in the past couple of weeks portrays a relatively robust picture of underlying demand with a few continuing hints that activity could moderate just ahead," he said.
DiClemente added that he sees a revision of the latest economic growth report to a 4.1 percent pace.
Among the few dissonant voices, Paul Nolte at Hinsdale Associates said the rally scenario appears too easy.
"Like the 5:35 pulling out of the station, the year-end rally is right on schedule," he said.
"In fact, it is gaining steam and passengers. Will the weight of everyone jumping onboard slow it down, or are the engines strong enough to pull the load to its final destination [of new highs]?" he asked.
Nolte said the rally is being fueled by an infusion of cash that may not support long-term gains.
"We still don't think the markets are ready to blast to new highs," he said.
"The money has flowed very quickly from the bearish to bullish camp and is currently at levels that have historically signaled a market decline," Nolte said.
He said there are parallels to the bubble of a few years ago, with technology attracting a lot of cash.
"Like a moth to a flame, investors are flying back to the more volatile issues, technology, while ditching the stable stocks like food, personal products and utilities," Nolte said.
"While we have been skeptical all along, we are watching some of these possible moves higher as an overall indication of a healthier market environment. As much as we would like to make a bold move in the market, we find that our best moves may be around the perimeter," he said.
Bonds posted solid gains for the week. The yield on the 10-year bond fell to 4.502 percent on Friday from 4.564 percent a week earlier and the 30-year bond fell to 4.692 percent against 4.746 percent. Bond yields and prices move in opposite directions.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained