This is The Wall Street Digest Hotline Update for Friday, August 24, 2007, at 6:00 p.m. EST.
Stock prices were up today, as liquidity and sub-prime worries continue to fade. At the close, the Dow gained almost 143 points, closing at 13,378, while the Nasdaq gained almost 35 points, closing at 2,576. Oil closed up $1.33 to $71.16 per barrel, and gold closed up $9.70 at $678.10 an ounce.
Another calm day on Wall Street helped reduce investor fears over liquidity and the sub-prime mortgage crisis. Also, new homes sales rose 2.8 percent in July after falling 4 percent in June. In a second report this morning, factory orders for big-ticket durable goods jumped 5.9 percent in July, the best gain in ten months. Both reports were better-than-expected.
Stay fully invested! The U.S stock market is the most oversold, undervalued stock market on the planet during a global economic boom and bull market. The 1,000-point decline in the Dow Industrial Average from 14,000 is a gift. Use this pullback to invest any remaining cash that you may have.
The dollar has already lost 35 percent of its 2002 purchasing power. More rate cuts are coming and they will further weaken the dollar. The greatest economic boom and bull market is still underway. I expect new highs in most stock market indexes by year-end. Global/international investments will enhance your investment returns as the dollar declines against other currencies.
Real estate is an illiquid, high-risk investment! Do not look for real estate bargains. Renting a home or condo is cheaper than owning. When that scenario reverses, it will then be safe to buy a home or condo. Real estate analysts do not expect the housing down turn to bottom until 2009 in Florida and California.
Stay close to our telephone/e-mail/website Hotline Updates.
The next Hotline Update will be on Tuesday, August 28, 2007, at 6:00 p.m. EST.