The mood on The Street has been a bit more upbeat this week. The S&P 500 has advanced 20% since last Friday's bottom ending with the first four day up-streak since April. Much of this holiday glee has been attributed to another $800 billion aid package from the U.S. Government.
The Fed plans to purchase up to $600 billion of debt issued or backed by Fannie, Freddie, Ginnie Mae and the Federal Home Loan Banks. In addition, with the help of the Treasury, the Fed may provide up to $200 billion in financing to investors purchasing securities related to student loans, credit-card debt, car loans and small-business loans. The hope is that this will not only provide additional liquidity to these areas, but also indirectly lower mortgage rates and help put a spark back in the housing market.
A real test of this new found optimism may be retail sales estimates from the upcoming Black Friday. This will be used as a barometer to gauge the success of the holiday shopping season. Given the resilience the market has shown this week and the already bearish estimates for Friday, even a modest showing from shoppers may giver further legs to the market's recent gains.
We wish you and your family a happy Thanksgiving. As always, feel free to contact us with any questions or concerns.
Sean and Adam
smansell@evanstonadvisors.com
aerickson@evanstonadvisors.com
