Best Job In America: Do-Nothing Fed Governor

How would you like to have the entire financial community hanging on your every word, meet with your buddies 8 times a years and generally be rewarded handsomely for doing just about nothing?

If that sounds like a sweet gig to you, maybe it's time to look into becoming a member of the Board of Governors of the Federal Reserve. Naturally, some background (make that a lot of background) in economics is a necessary part of the resume, but once you're in, the perks are substantial and the hours are better than those of even the best-paid banker.

For 6 consecutive meetings the Federal Open Market Committee (FOMC) has met and done nothing. Sure, under the guidance of new chief Ben Bernanke, they were supposed to keep the economy cruising and hold the line on inflation, and they've achieved one of those objectives... well, maybe not, but they've managed to get through the last 10 months without changing the federal funds rate (the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight) and they aren't expected to do anything about it when they meet tomorrow, May 9, so make it a 7 in a row and a year of doing nothing. Not bad.

While some self-proclaimed experts are calling for a rate decrease, the nearly unanimous opinion is that the Fed will - and should - do nothing. America is pretty stable with a 5.25% fed funds rate, though the first quarter GDP (+1.3%) was the weakest in four years. While lowering the rate may prevent a hard landing later in the year or in 2008, is anybody really prepared to offer the oil companies any incentive to raise gas prices any further?

If anything, America needs to tighten the old economic belt a little. We're still wallowing in the aftermath of former Chairman Greenspan's unprecedented credit creation cycle, epitomized by the bust-up in the mortgage markets and a generally ailing real estate market.

And while loose money isn't exactly sound monetary policy, Wall Street isn't exactly complaining - today's modest decline was only the 4th down day for the Dow in the past 28 sessions.

So, after 2:15 pm tomorrow, expect the stock markets to get back to business and go on another in a long series of shopping sprees. Corporate profits have seldom been as good as the past couple of years and the 1st quarter of 2007 has turned out to be nearly exceptional across almost all industries.

Dow 13,309.07 -3.90; NASDAQ 2,571.75 +0.80; S&P 500 1,507.72 -1.76; NYSE Composite 9,788.03 -37.06

Market Internals: Declining issues held sway over advancers by nearly a 3-2 margin. New highs: 303, new lows: 88, in line, considering the A-D showing.

Oil kicked up a bit after 6 consecutive sessions of declines, gaining 79 cents to end up at $62.26, a manageable level which could actually auger - dare I speak - lower, or only moderately higher prices come summer. Consumers have had about enough pain, especially those driving trucks or SUVs which routinely take $80-100 or more to fill up.

Gold, again tantalizingly close to the $700 mark, backed off $3 to close at $687.40. Silver finished the day down 4 cents at $13.60.

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One to watch: Marvel Enterprises (MVL), the people behind Spider-Man, turned in blowout numbers Tuesday morning, though investors thought best to sell into the news. The stock was down as much as 0.84, but gained all day to close down just 0.20 at 29.40. There could have been some options and short shenanigans going on, but the future of the company is still somewhat cloudy as they continue to move parts around. Significant is that Marvel will be making most of their own movies in 2008, as opposed the current practice of licensing their character rights and receiving only a portion of box office receipts.

Analysts expected 35 cents per share, but Marvel shocked with 56. 2007 profits are expected to at least double last year's, so the good news is already partially baked in or the stock could continue to run. It's gone from below 20 to a peak just over 30 in the last 9 months and may be in a consolidation phase. Still, the stock looks like a keeper, a good bet to hit the 38-42 range by next summer.

No Stopping the Bull: Another New High for Dow

If you've missed the recent stock market explosion, take heart. The new highs will continue to come and stocks are poised to make impressive gains. The US economy - despite some persistent, nagging problems - continues to expand at a measured pace and corporations have never had it so good. This bull is getting a second wind. 15,000 on the Dow by the end of the year is looking more achievable every day.

Dow 13,312.97 +48.35; NASDAQ 2,570.95 -1.20; S&P 500 1,509.48 +3.86; NYSE Composite 9,825.09 +32.09

CNNMoney reports that today's Dow gain matches an 80-year-old record of 24 up sessions in the last 27. The previous run was in the summer of 1927.

While the Dow continues to awe and amaze, the NASDAQ dropped a little more than a point, though the S&P 500 moved to within 18 points of its all-time closing high. Once again, the if the S&P manages a new high, it could spark a significant break out, leading all indices higher.

The markets were buoyed by a confluence of forces today including Warren Buffet's suggestion that his Berkshire-Hathaway conglomerate would be pursuing an acquisition in the $40-60 billion range.

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Speculation on what Buffett will be buying ranges from the outrageous (think Yahoo or Adobe Systems) to the marginally feasible - like Dow components Caterpillar (CAT), DuPont (DD) or McDonald's (MCD) - each of which are within his market cap range.

Alcoa (AA) management announced that it would be pursuing rival Alcan (AL) via a hostile bid. Both stocks were sharply higher, with Alcan gaining more than 21 points at the close - a nearly 35% increase - to 82.11.

Oil fell for the 6th straight session, a run of losses which has drivers cheering. The price of crude on the NY Mercantile Exchange fell 46 cents to $61.47. The losing streak was the longest in more than 7 months.

Advancers and decliners were nearly equal, with about 100 more issues gaining ground than losing. New highs checked in at 468, versus only 66 new lows. Anybody shorting this market or individual issues, is likely to be taking it on the chin. Our new highs-new lows metric continues to suggest the bull will run strong for some time and that there is no top in sight.

Gold again moved closer to the magic $700 mark, closing at $690.30, up 60 cents per ounce. Silver experienced a similar gain of 11 cents to close at $13.64. The metals continue to confound investors who see inflation everywhere, but no corresponding gains in the time-worn precious metal hedge.

Stocks are where it's at, and with everybody - including the Oracle of Omaha - thinking big, this rally could run for months more.

Dow Sets Another New High; S&P Inches Closer

Stocks continued their progression higher on Friday amid merger news and a somewhat mellowing jobs number for April. The Dow set another record high close and the S&P 500 got to within 20 points of its all-time high.

Microsoft (MSFT) is rumored to be interested in buying up Yahoo (YHOO), a marriage that would give both companies some heft in the ongoing ad and search war with Google (GOOG). Yahoo would likely benefit from the programming mindset at Microsoft, while Gates' company would get proven online business savvy and a healthy roster of advertising accounts. Neither company would confirm or deny rumors.

Dow 13,264.62 +23.24; Nasdaq 2,572.15 +6.69; S&P 500 1,505.62 +3.23; NYSE Composite 9,793.00 +39.06

The Labor Dept. announced the creation of 88,000 jobs in April, the smallest gain in more than two years, though the figure was in line with expert expectations.

Advancers led declining issues by a 7-5 margin; There were 495 new highs, 73 new lows. The internal numbers suggest that the bull is running along at an even pace.

Light crude for June delivery fell to $61.93, losing $1.26 on the day, the fifth straight day of decline for oil and welcome news for anyone with a gas tank to fill.

Gold: 689.70 +5.30
Silver: 13.53 +0.02

More Gains as Rally Extends; S&P Tops 1,500

The run continued on Thursday, despite some very disappointing news from General Motors (GM), the markets were buoyed by a positive Labor Dept. productivity report which showed an uptick of 1.7%, nearly a full percentage point higher than the consensus estimate.

With the S&P 500 breaking an important psychological mark, that particular index is poised for a breakout. The all-time high is within hailing distance, a mere 25 points higher and when that is breached, the floodgates will be open. The S&P will join the Dow in uncharted territory and the gains should continue for a good period of time.

Dow 13,241.38 +29.50; NASDAQ 2,565.46 +7.62; S&P 500 1,502.39 +6.47; NYSE Composite 9,753.94 +35.94

It's important not to get married to stocks during this phase, as sectors and industry groups will rotate, though the overwhelming drivers continue to be tech, innovation and globalization. Companies that can leverage their advantage in these areas will emerge as winners and appreciate in spurts. This may become very much a traders' market, with quick turnaround trades the key to making money.

Buy and hold strategists need not be dissuaded by this, as the long-term viability of many leading companies should remain intact throughout.

Even though today's market action was somewhat muted, it was still in keeping with the overall positive tone which has prevailed of late. Advancing issues outdid decliners by 17-14 margin. New highs stood solidly at 419 versus just 62 new lows. That number continues to amaze and indicate that the rally will continue unabated.

A 4th straight day of slippage in the price of oil added to the upbeat mood. Light, sweet crude for June delivery dipped 49 cents to $63.19.

The precious metals played contrarians for a day. Gold closed at $684.40, up $9.30, while silver was less of a player, gaining 18 cents to $13.51. These commodities have been playing this game for over a year now and are nowhere near their 2006 highs. After sizable run-ups in the first part of the decade, the metals have been lackluster performers since early 2006.

US Stocks on Fire, Investors Face Buy-Sell-Hold Dilemma

In the face of a rapidly-rising market typified by another semi-spectacular day in which the Dow set another record close, investors are now faced with the time-worn predicament: Buy, Sell or Hold. Most, judging just by the indices, are holding and buying more, as first quarter corporate earnings reports continue to flow in with satisfying regularity.

One could hardly blame them. The run-ups from mid-March to today (just over 6 weeks): Dow, up 1136 points; NASDAQ, 207 points; S& P 500, 118 points; NYSE Composite, 790 points. These are all in the neighborhood of 8% gains, which normally (whatever normal is these days) would be good for 6 months or a year. Some individual stocks have fared even better.

Impressive, indeed, and still capable of going higher, much higher. Your investment outlook will certainly vary by the length and quality of your experience. Anyone who's been in stocks for the last 20 years can be colored by the deep declines of 1987 and the dot-com collapse of 2000, but also by the spectacular gains of the late nineties - especially 1999 - and this excellent early run since early 2003.

That's where the quality of your experience comes into play. If you were on the right sides of trades in the boom years, you took the declines in stride. Contrary to that perspective would be buying in close to peaks and then being blindsided. Most of us have experienced a share of both sides.

Dow 13,211.88 +75.74; NASDAQ 2,557.84 +26.31; S&P 500 1,495.92 +9.62; NYSE Composite 9,718.00 +78.21

To offer some perspective, while the Dow is at all-time highs, remember it took 6 1/2 years to get to them. The NASDAQ is still off 50% from its all-time high, so there's plenty of room there. And the S & P 500 closed at 1527.46 on March 24, 2000. It's just 30 points from there - an all-time high.

More and more money - much of it created by the Federal Reserve's loose credit policies of 2001-2004 - continues to flow into stocks and there's no indication that it's about to stop. I have to admit to being late to the party, thinking there was going to be a major correction, but that seems more and more a remote possibility.

If you're in this market now, hold and buy more. If you're not already in, it's not even close to being too late. In fact, the next 6-9 months may be exceptional.

Find what you're looking for with Yahoo Search - when close isn't good enough.

The US economy is still the most stable on the planet when investors look for gains without much risk, they look to the NYSE and the NASDAQ. Stocks are going to continue higher and there's no looking back.

Volume was strong again today, as has been the case of late, and the indices other than the Dow experienced stronger gains, indicating that the Dow's pleasure may be spreading.

The advance-decline line also gives this more credence, as advancing issues outpaced decliners by a 3-1 margin. As well, there were 406 new highs and a paltry 83 new lows, more evidence that this rally could actually be gaining momentum. That is not surprising, as these kinds of things run in cycles. The first phase was getting to the new records on the Dow, and now, phase two, will be longer and more sustained, though probably not as exciting. Nobody is going to forsake 12-15% gains over the next six months, however, which is exactly where this is heading.

Oil prices eased again on Wednesday - the third decline in a row - by 71 cents to close at $63.68. Gold and silver were also lower, though only marginally. Memo to gold bugs: It's time to sell some of your excess and try your hand at stocks.