Weekend Reading: How High?

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

It was another solid week for the markets, one that put the last of the three major U.S. indices in positive territory for the year. (See table below.) Equities have been on a remarkable ride since the lows of early March. Now the question is whether the gains can continue. Most of what looked relatively inexpensive then no longer does, and developing markets are little better (even if they look better positioned for growth than the U.S.).

Looking forward to next week, anyone who says "green shoots" will be ruthlessly ignored. I'm kidding. Mostly. Nevertheless, most of the attention will be on whether recent signs of economic recovery are persisting, or if -- as many bears think -- they are merely transient and tied to recent economic stimulus. The indices will likely be flat or in a narrow range, with the markets responding to the Iranian elections, oil prices and next week's housing data. ...