Investors returned quietly to Wall Street after the long holiday weekend as equity markets oscillated between small gains and losses for most of trading on Tuesday. Moody’s downgraded Portugal’s sovereign debt to junk-status, sending the euro lower in the currency markets and gold even higher. The hot yellow metal lead the way up and jumped more than $30 at the start of trading, and was able to climb back above the psychologically significant $1,500 level. Oil went along for the ride as well, gaining upwards of 2% for the day, as crude futures marched past $97 a barrel.
On Wednesday domestic equity indexes were able to edge higher as investors bought in on the dip. However, light trading volumes are always a risky environment to participate in, simply because volatility can strike even quicker. Investors are waiting to hear from the ECB on Thursday regarding its interest rate decision, while on the home front the employment report due out on Friday will be the main event. Gold continued its advance and closed just under $1,530 an ounce on Wednesday, while oil also crept higher above $97 a barrel, despite tightening from China.
The shortened holiday week has been very kind to some of our recommendations, but nonetheless, we are taking profits on some of our positions in our All-ETF Portfolio. Light-trading volumes are usually unfavorable for active traders since liquidity is not as abundant, and for that reason we are sticking to our “safer” recommendations in case volatility sweeps through the street again.
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