The E.U. stepped up in a big way over the weekend by announcing a $1 trillion fund to backstop its member countries. The European Union plans to raise the money with the help of the International Monetary Fund so that funds are available to member countries when capital cannot be accessed in the markets. Speculation has been growing over the last few weeks that more countries in the EU could be facing the same problems that Greece has encountered, but the new fund alleviated those concerns for now. The markets have rallied in response to the news, with the Dow picking up almost 5%, the Nasdaq gaining 6.7% and the S&P 500 climbing about 5.3%. While stock jockeys cheered on the news, precious metal investors were enjoying their own rally as well. With new fears of worldwide inflation being fanned this week, gold saw a new all-time high hit on Wednesday while silver has rallied almost 6% this week. The charts show a clear picture, with the SPDR Gold ETF up 1.7% this week, despite today's profit taking and the iShares Silver Trust flat on the day, but up more than 5.8% this week. Another encouraging sign of an economic rebound can be found in the retail sector. While most retailers aim to make money during the holiday season, both Macy's beat Wall Street estimates when they eeked out of profit of five cents per share in the quarter as sales increased by 7% to $5.6 billion. Kohl's earned $199 million in the first quarter as sales surged 11% to $4.1 billion. While second quarter guidance failed to impress analysts, the company did raise full-year guidance as they are confident in current macro-economic trends. Shares of theSPDR Retail ETF were trading higher by more than 7% this week, despite today's profit taking. Safe Harbor Statement: Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints. Nothing in this article is, or should be construed as, investment advice. |
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