Weekly Market Commentary:

Friday's employment report turned out to be mildly bullish for U. S. stocks, as the three major averages all posted about a 1% increase in value last week. The Dow Jones Industrials finished the week up 113.36 points to close at 12.307.49. The S&P 500 picked up 13.13 points to close at 1,409.84 while the Nasdaq Composite put on 23.65 points to end the week's trade at 2,437.36.

Gains in non-farm payrolls for November were higher than usual (174,000) and well above economist's expectations. November unemployment held steady at 4.5%, a five and a half year low. Tight labor markets combined with red-hot action in M&A and LBO transactions fueled further bullishness on Wall Street and around the globe last week.

The Iraq Study Group's report didn't reveal anything we didn't already know, and did little to sway financial markets one way or the other. Saying the U.S. is again facing another "no-win" situation has been the drumbeat of the mainstream media since the time the war began. There is nothing less reassuring than political retreads lining up to regurgitate the same talking points over and over. Unfortunately, not one of our fearless leaders has bothered to ask, "where's the beef?"

The coming week begins with Treasury Secretary Henry Paulson addressing a housing forum at the Office of Thrift Supervision on Monday. Tuesday the Fed policy making committee is expected to hold interest rates steady while General Electric provides their annual global business outlook. Wednesday November retail sales are expected to show lackluster growth while any positive surprise would probably give sagging retail issues a lift.

On Thursday, Paulson and Fed Chairman Ben Bernanke meet in Beijing for high level discussions with the Chinese, who will be encouraged to enact economic reforms sooner rather than later. That may prove to be good theater, but realistically it's doubtful the Chinese will do much more than smile and laugh for the cameras. Friday, the CPI report is expected to rise 0.2% in November after a 0.5% energy-led drop in the October index.

Finally, to support our call for a year-end rally--70% of active fund managers are unfortunately underperforming the market averages this year. If you can't beat them, what would you do? If you said "join them" you are probably on the right track. What really happens is still anyone's guess, but the market is beginning to look a lot like Christmas. Time will tell.

Stay tuned!