Riding Higher: Weekend Reading

Good Sunday afternoon, and welcome to another edition of Weekend Reading. First a look back at the week that just finished, then a look forward to the week ahead and, lastly, a summary of articles and research papers worth reading.

It was a solid week for the major markets, with advances more or less the rule. (See the table below.) Even the beleaguered dollar found its way higher this week, which meant gold and oil went in the other direction. The November jobs data, released Friday, sealed the deal on a surprisingly positive week, and Dubai sank without a splash. Nonfarm payrolls declined by a much lower-than-expected 11,000 (a surprise to anyone but readers of this column last week), making the market feel like a recovery is solid and underway.

Looking ahead to next week, the trend likely holds: Managers are playing catch-up in a year in which the markets advanced much faster and further than expected, confounding bears (and even many bulls). At the same time, economic indicators have largely bottomed and turned upward, even though they have done this under the forced-march influence of global synchronized stimulus. The effect has been that it's been more painful to be out of the markets than in, to the endless dismay of bears. As I will write in my year-end piece in a few weeks, that will likely change in 2010, but for now it is what it is.

Turning to economic indicators, we have the international trade gap report and jobless claims (which will likely come in under consensus) on Thursday, and November monthly retail sales and a preliminary look at December consumer sentiment on Friday.

As for earnings, next week will bring reports from Pep Boys(PBY), Bank of Nova Scotia(BNS), and Costco(COST).

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