It is like trying to blame the media for the troubles of the world: if only they stopped reporting events then they would go away. The problem is that fundamentals always triumph over hot air. Nobody really wants to be seen to be rocking the boat as the US establishment led by President Obama attempts to talk up the market. This is of course nonsense, and spin of an obvious kind. Results that came in slightly less worse than analysts' own forecasts were greeted as returning prodigal sons.
In the past week the Wall Street pundits did their very best to keep the rally going despite some deeply unimpressive results from bellwether stocks like UPS ( UPS) and 3M ( MMM). Having shown a precocious 28 per cent gain in six weeks, the stock market rally is facing strong headwinds in the upcoming bankruptcy of two top US auto companies, a commercial property slump, a deteriorating international financial environment, and general over-optimism about recovery prospects in the banking sector. However, the precious metals clearly established their position as the place to be as the bear market rally breaks down. This left gold prices at their highest levels in three weeks but fell short of a third break of the $1,000 barrier. Gold finished the week up 5.1 per cent at $913 while silver jumped 8.4 per cent to $12.90 as precious metals became a safe haven from the faltering six-week old bear market rally.
