Money & Investing – Banks.com

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The U.S. stock market is kicking off this shortened Thanksgiving week with a major equity rally. The Dow is up more than 170 points in early trading, barely an hour after opening. The Nasdaq and the S&P 500 are also both up significantly so far this morning. The push comes as comments by James Bullen, a member of the Federal Reserve Board, indicated that he thought that the Fed should continue its economic stimulus efforts by buying mortgage-backed securities beyond Quarter 1 of 2010.

The implication that the Fed is still solidly behind efforts at economic stimulus is sending investors into a tizzy of buying. Also helping the cause are expectations that this year’s holiday shopping season will be better than last year’s relatively subdued affair. As consumers gear up for holiday spending — with news that the economy is recovering to encourage them — investors are hopeful that things could take a turn for the better.

Gold reaches new record, U.S. dollar tanks

What started as profit taking on the part of U.S. dollar traders has turned into something else as gold reaches new highs and global equities rally. With risk appetite very much in evidence today, it is little surprise that the U.S. dollar is tanking in forex trading. The greenback is being shunted aside in favor of riskier investments that also come with higher rates of return. The dollar’s staid rates of return are acceptable at times of economic anxiety, when investors are simply looking for capital preservation, but at a time like this, when risk appetite is driving the markets, the dollar’s returns just aren’t glamorous enough.

Of course, it is important to note that financial markets are vulnerable right now, and that things could change rather quickly — especially if the Fed backtracks or if the holiday shopping season doesn’t start out on an upbeat note.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.