21 Apr 2006 Where’s the Risk?
Posted at 12:36h in The Friday BriefThe Fed may be near the end of its long-term tightening process according to minutes released from their last Open Market Committee meeting. Since the release the equity and commodity markets have soared. The CRB index of commodities was up 5% in the following two days, led by petroleum, gold, copper, and platinum. The stock market gains were boosted by materials, energy, and industrials. Extra lift came from some superb earnings reports from individual companies in the groups just mentioned, as well as from some leading technology companies, banks, brokers, and pharmaceuticals. Is the return of “irrational exuberance” in our future? One could argue that it already exists in the commodities and metals markets as well as the related company stock prices. They are up huge this year following a two-year bull market.