friday - bull or bear

Corporate profits are at all-time highs and bond rates in the Treasury market are virtually at record lows. That's a good combination for stocks, and it helped trigger a 255-point rally in Wednesday's trading. What's more, a surprisingly positive read on the ISM August manufacturing report delivered a strong blow to the double-dip recession pessimism that has plagued investors for many months.

Since 2001, business profits have doubled, even while the stock market dial has hardly moved. Earnings estimates of the S&P 500 looks to be valued at a historically low 11.5 times earnings. That comes to an 8.7 percent yield on shares, compared with only a 2.5 percent rate on 10-year Treasuries.

If Washington can just keep its paws off of business and let market processes work, firms will continue to prosper domestically and internationally and will pick up their hiring.

Gross domestic purchases, by U.S. residents of goods and services, increased 4.9 percent annually -- a full percentage-point stronger than the first-quarter results.

Import prices increased in the second quarter, which lends credence to the idea that the economy is doing better than folks think. The bulk of those imports are being used for capital-goods investment, which is a good thing.

More here.

Perhaps the real reason the gold index has just shot up is due to instos realising things are heating up and inflation is inevitable.