The markets were up this week, with the NASDAQ leading the charge with a 1.78% gain, the S&P a bit behind, up .99%, and the Dow trailing, but still up nicely, at .55%.  The S&P and NASDAQ both set new highs for the year this week , but the S&P retreated below year-high levels Friday.  Retail sales numbers beat expectations, a good sign for our continued recovery, but the markets seemed nonplussed.

We continue to be leery of bonds. We think that interest rates are likely to go higher in the next few years. As such, bond performance will suffer. We think it best to keep maturities short for now.

Next week, the Fed meets to discuss the economy and interest rates.  We don’t expect the rate to change.  However, we do think the language of the statement will reflect changing attitudes about the recovery. We’ll also get data next week on housing and inflation.