The Market Wrap 12-3-10

By Jason Fittler

Looking for new highs!

The market has made some good moves over the last week, once again we find ourselves above 4800. The question is will we move higher?

Over the past week there has been a lot of positive news out of the US which has pushed the market higher. It is starting to feel a lot like a recovery as such I am expecting to see the market touch new highs in the coming months.

There is still a lot of economic issues to sort out but to date we are seeing increase pricing in Iron Ore, unemployment rates have stabilized and the reporting season delivered solid results and a positive outlook.

Overall 44% of companies surprised to the up side while 29% disappointed. Overall this is an increase of 5% more companies surprising to the upside.  This increase was driven mostly by the big end of town. Couple this with better cash flows, high dividends and low levels of debt and the market is starting to look like it is in good shape.

The one caution is that at the current price the market is around fair value, any move up from here would be on the back of increase in expectations more than based on fundamentals.

The main take away is that you can buy quality stocks with less risk in this market.

Take this opportunity to build yourself a high yielding portfolio, also note we are expecting 13% growth in the market for this year.