What an amazing week: Buffett bails out Bank of America; Steve Jobs resigns as CEO of Apple; an earthquake in the northeast; a hurricane barreling towards NYC (as I write this); a flash crash in the German DAX; Gaddafi is on the run; gold finally takes a breather; and Fed Chairman Bernanke at Jackson Hole, Wyoming.

August 2011 is on pace to be the worst August since 1990 and the fourth worst on record. The financial sector made a new low this week and gold finally showed us it can also go down.

Bernanke, speaking in Jackson Hole, Wyoming, said the central bank’s policy panel would meet for two days in September instead of the scheduled one-day meeting to discuss any more stimulus. While expressing long-term optimism, Bernanke said the Fed found recent developments troubling and saw a low inflation rate.

The markets while dipping on the open, ended up higher. It’s the first up week after 4 down weeks. The Dow gained 4.2%, the S&P climbed 4.6%, and the Nasdaq is up 5.7%.

 

 

Key Rates – from Bloomberg.com

CURRENT 1 MO PRIOR 3 MO PRIOR 6 MO PRIOR 1 YR PRIOR
Fed Funds Rate 0.07 0.10 0.10 0.15 0.19
Fed Reserve Target Rate 0.25 0.25 0.25 0.25 0.25
Prime Rate 3.25 3.25 3.25 3.25 3.25
US Unemployment Rate 9.10 9.20 9.00 9.00 9.50
1-Month Libor 0.22 0.19 0.19 0.26 0.26
3-Month Libor 0.32 0.25 0.25 0.31 0.30

 

Economic Calendar for next week – from Econoday.com

Monday Aug 29 Tuesday Aug 30 Wednesday Aug 31 Thursday Sep 1 Friday Sep 2
Redbook
[Bullet
8:55 AM ET

Narayana Kocherlakota Speaks
12:15 PM ET

FOMC Minutes
[Star]
2:00 PM ET
2-Yr Note Settlement5-Yr Note Settlement5-Yr TIPS Settlement7-Yr Note Settlement

Chicago PMI
[djStar]
9:45 AM ET
Factory Orders
[djStar]
10:00 AM ET
Farm Prices
[Bullet
3:00 PM ET
Weekly Bill Settlement

Jobless Claims
[Star]
8:30 AM ET
ISM Mfg Index
[Star]
10:00 AM ET
Money Supply
[Bullet
4:30 PM ET

 

 

 

 

 

 

 

 

Loan applications for home purchases fell last week to the lowest in more than 14 years even as mortgage rates tumbled. Buyers are remaining on the sidelines as the unemployment rate sticks above 9 percent. Volatility in stock markets this month, spurred by concerns that the global economic recovery, is weakening demand.

 

 

 

 

 

 

 

 

 

 

 

This week’s AAII Sentiment Survey results:

  • Bullish: 36.4%, up 0.9
  • Neutral: 22.6%, down 2.0
  • Bearish: 41.0%, up 1.1

Historical Averages:

  • Bullish: 39%
  • Neutral: 31%
  • Bearish: 30%

The AAII Sentiment Survey has been conducted weekly since July 1987 and asks AAII members whether they think stock prices will rise. remain essentially flat. or fall over the next six months. The survey period runs from Thursday (12:01 a.m.) to Wednesday (11:59 p.m.). The survey and its results are available online here.

 

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