This week saw a slight pullback in the markets.  The Dow was down 1.6%, the S&P 2.2%, and the NASDAQ 2%.  The transport sector, generally considered a leading indicator, took a particular beating this week, ending down about 3%.  Despite the week’s losses, the markets are still on firm footing. Quarter-to-date, we are hovering around a 15% gain.  Year-to-date, the markets are up about 18%. With three business days to go in the month, it seems we may have dodged the “September Curse.”

We saw the economic indicators mixed this week.  There was a brief upward spike in stock prices Wednesday after the Fed’s announcement that although the economy was improving, interest rates would stay low.   This spike changed quickly to a dip, illustrating the maxim that traders “buy the rumor and sell the news.”  Once the announcement was made, it was already old news, and those who saw gains from the announcement sold their stocks to cash in.  Sounds a little like the old days!

Gold seems to be the topic du jour.  Investors view gold as a hedge against inflation, which some are predicting to be a result of the Fed’s monetary policies.  Gold is showing signs of speculative investment as money has recently poured into the gold ETFs.  Gold ETFs must buy gold when people buy shares, driving up its price.

Next week is a very heavy week for economic data.  We will get unemployment numbers for August, the Institute for Supply Management figures for manufacturing and Consumer Confidence, to name a few.  We are also in the earnings pre-announcement season which may bring some positive surprises.