The Markets This Week

November 19th, 2013

Things on Wall Street look pretty good. On Main Street, not so much.

The stock market jumped another 1.6% last week, hitting an all-time high for the 36th time this year. Equity markets the world over rose about 1%.

These synchronized gains followed Thursday’s appearance in the U.S. Senate of Federal Reserve Vice Chairwoman Janet Yellen, who has been selected by President Obama to replace the central bank’s departing chairman, Ben Bernanke. Yellen indicated there would be no change any time soon in the Fed’s policy of monthly bond buying, a quantitative-easing strategy that has fueled much of the market’s gain this year. In other words, tapering remains on hold. What little concern remained about a policy shift effectively disappeared with her comments.

On the week, the Dow Jones Industrial Average gained 200 points, or 1.3% to 15,961.70, and the Standard & Poor’s 500 index rose 28 to 1798.13. Both were new highs. The Nasdaq Composite index added 1.7%, or 67, to 3985.97, and briefly crossed the 4000 mark for the first time since September of 2000. The MSCI World Index rose 1% on the week.

The Fed’s clampdown on interest rates has fueled a headlong rush into risk assets such as stocks. The resultant wealth effect appears to have spilled into the disparate New York City worlds of fine art and taxi medallions.

An Andy Warhol painting sold for $105 million last week, the highest price ever for the artist. A Francis Bacon work, “Three Studies of Lucian Freud,” sold for $142.4 million, a record for a single piece. At the first auction in five years of yellow cab medallions, a pair went for $2.5 million, almost double the price at the previous auction. The city restricts the number of permits to about 13,000 (Source:  Barrons Online).

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