Stock trader at the NYSEIt's shaping up to be another volatile week for the dollar and -- by extension -- for stocks. The market was closed Thursday and booked just a half-day of light trading Friday, meaning traders could have twitchy fingers come Monday's opening bell. And given all that transpired globally over the Thanksgiving weekend, well, the idea of holding risky assets such as stocks could give investors heartburn.

Consider that the ink was barely dry on the European Union's and International Monetary Fund's $110 billion bailout of Ireland when news broke that France, Germany and the EU are concocting a plan to restructure the sovereign debt of some of the other eurozone countries currently on the path to insolvency -- with bondholders left holding part of the bag.

As part of this parade of would-be deadbeats, Portugal found it necessary to assure the bond and credit default swap markets that its funding needs are in fine fettle. Nevermind, that Ireland peddled that same line a week ago and look what good that did. At the same time, across the globe in Asia, North Korea's artillery barrage on a South Korean island has the U.S. and South Korean navies conducting war games in the Yellow Sea. Don't be shocked if stocks slide again as money flows instead to the safety of the dollar.

Moving Mostly Sideways

"It should come as no surprise that with the on-risk trade now switching to the off position, the U.S. dollar is firming appreciably -- the [U.S. Dollar Index] has rallied above its 100-day moving average for the first time this year," David Rosenberg, chief economist and strategist at asset manager Gluskin Sheff, writes in a note to clients.

Perhaps a good Black Friday weekend and strong holiday selling season will draw traders' gaze away from hostilities and financial crises overseas, but then there would be no recent precedent for such a trend to last very long. After all, we've been in a sideways market for a year, with the S&P 500 ($INX) rolling around between a low of 1,022 and a high of 1,255.

"The bottom line is that for the past year, the S&P 500 has crossed above the 1,200 mark five times and has moved below the 1,100 threshold no fewer than 13 times," writes Rosenberg. "Sell at the highs, buy at the lows, until there is a decisive break either way."

Have a look at this 52-week chart of the S&P 500 below. Broadly speaking, U.S. equities were dead money until the early days of September, but here's the real kicker: For for all their trouble and risk, stocks have gained just 7% in the past year.


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skip707

You can see where the idiot Burrows has his money. It is not in the stock market. There are too many of these nuts out there with an axe to grind!

November 30 2010 at 5:47 AM Report abuse rate up rate down Reply
chris1011

It has been a sluggish month for stocks, but dividend-focused investors have enjoyed some healthy gains of late. In fact, a look at the top-10 tickerspy Indexes ranked by yield shows all but two have rallied for the month with many sectors climbing 3% or more for the period. As a whole, the Mortgage Investment Stocks Index climbed 1% over the past week, adding to a nearly 3% rally for the month. With components yielding 8.9% on average, based on historical distributions, the segment takes the title as tickerspy's highest-yielding Index. Mortgage REITs like Hatteras Financial (HTS), Cypress Sharpridge Investments (CYS) and Invesco Mortgage Capital (IVR) helped the Index outperform as the real estate plays jumped 5% over past month. And despite climbing 2% for the period, sector giant Annaly Capital Management (NLY) currently sports a 15% annual dividend yield, based on its latest distribution. Meanwhile, American Capital Agency (AGNC) continues to be the top income play in the space with a whopping 19% yield.

November 29 2010 at 5:00 PM Report abuse rate up rate down Reply
dschip54

Don't be to gloomy and use the word risky stocks. Personally, I prefer good quality stocks with dividends over cash. Being invested in natural resources and utilities will prove to be a better solution.

November 29 2010 at 10:30 AM Report abuse rate up rate down Reply
marine1942

But Obama tells us everything is o.k.--recession over, unemployment is acceptable, losing your home is normal, all the world loves him--sure go ahead and buy stocks

November 29 2010 at 9:06 AM Report abuse +3 rate up rate down Reply