On Tuesday, the Fed reaffirmed its position that inflation poses a greater risk than slowing economic growth. Record earnings from major investment banks released this week seemed to support the idea that economic activity is far from anemic. With Wall Street charging ahead, inflation creeping in appears to be the only thing that could spoil the party.
So all eyes were on today's CPI inflation report, which economists predicted would show consumer prices rising by 0.2% in November. Instead, prices rose by 0.0%.
The market celebrated with a fresh all-time intraday high for the Dow and multi-year highs for the other major indices.
Crystal ball check: In January, with the Dow near 11,000, I made the crazily optimistic prediction that the index would end the year at 12,800. With only 2.6% to go before we hit the magic number, it won't be easy, but we just might pull it off.
With crude oil prices hovering a couple bucks above recent levels, a timely pullback, perhaps in conjunction with Chairman Bernanke making headway in China, and maybe some better-than-expected holiday sales indicators could conspire to give us the necessary year-end juice to fulfill the prophecy.
Handcrafted by Flip on December 15, 2006 |
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