The markets have continued their steady plod back towards the recent highs of January 19^th. The Dow ended the week up 3.89%, the S&P 2.85% and the NASDAQ 3.04%.

Sovereign debt continues to be the buzzword of the markets.  Fears abound that the bailout of Greece and others will devalue the Euro.  However, markets were assuaged somewhat by Greece’s statement that it would not need a bailout and was progressing well.

As the U.S. deficit hovers near 10%, we remain concerned about inflation.  The spread between 2- and 10-year Treasurys is at an all-time high.  This fact could indicate an economic recovery, or impending inflation.  Either result will cause lower values for bonds currently being issued.  As such, we believe bonds are not a good value at this time.

Next week the big event will be Ben Bernanke’s semiannual monetary policy report to Congress.  Many market decisions will undoubtedly hinge on what Bernanke telegraphs at this meeting.