DJIA 11,100.54 -128.48 (-1.16%)
Nasdaq 2,239.08 -18.77 (-0.84%)
S&P 500 1,239.49 -13.90 (-1.12%)
NYSE Composite Volume 1.73 bln
2-Yr Note 2.59% +0.15
10-Yr Note 3.96% +0.13
30-Yr Bond 4.52% +0.10
2-Yr Note 2.44% +0.03
10-Yr Note 3.83% -0.02
30-Yr Bond 4.42% unch
Dollar Index 72.493 -0.087
Crude Oil (Aug) 141.65 +5.60
Nat Gas (Aug) 12.300 +0.294
Gold (Aug) 942.00 +13.40
DJIA 11,147.44 -236.77 (-2.12%)
Nasdaq 2,234.89 -59.55 (-2.66%)
S&P 500 1,244.69 -29.01 (-2.33%)
NYSE Composite Volume 1.49 bln
2-Yr Note 2.41% -0.06
10-Yr Note 3.85% -0.06
30-Yr Bond 4.42% -0.04
Dollar Index 72.580 -0.432
Crude Oil (Aug) 136.05 +0.01
Nat Gas (Aug) 12.006 -0.362
Gold (Aug) 928.60 +5.30
DJIA 11,384.21 +153.25 (+1.68%)
Nasdaq 2,294.42 +51.10 (+2.23%)
S&P 500 1,273.70 +21.39 (+1.68%)
NYSE Composite Volume 1.72 bln
2-Yr Note 2.47% unch
10-Yr Note 3.91% -0.04
30-Yr Bond 4.46% -0.05
Dollar Index 73.012 +0.342
Crude Oil (Aug) 136.04 -5.33
Nat Gas (Aug) 12.368 -0.609
Gold (Aug) 923.30 -5.50
DJIA 11,231.96 -56.58 (-0.50%)
Nasdaq 2,243.32 -2.06 (-0.09%)
S&P 500 1,252.31 -10.59 (-0.84%)
NYSE Composite Volume 1.52 bln
2-Yr Note 2.47% -0.07
10-Yr Note 3.95% -0.04
30-Yr Bond 4.51% -0.02
I became a little less negative on the stock market following the ECB statement Thursday morning. Everyone has been hoping for a dollar rebound to help stabilize the economy and stock market. So far, no luck. The Fed was ‘talking up’ the dollar because they could not raise rates and this tactic worked until two weeks ago when Trichet (ECB President) announced he would raise rates in the Eurozone. Foreign rates going higher make the dollar less attractive to investors.
As expected, Trichet and the ECB raised rates a quarter point to 4.25% Thursday morning, but it was the rhetoric that was positive for the dollar. Trichet commented that he has “no bias” for further rate hikes and he expects inflation to stabilize because of this one rate increase. The dollar index rallied 1% Thursday because of Trichet’s bullish commentary.
I was very worried about what Trichet might say. His goal is to combat inflation, but I was concerned that his rate hike would be counter-productive. The rate hike, and possible further rate hikes, would make the dollar relatively weaker, and seeing that commodities are denominated in dollars, he would be fueling inflation. However, my concerns were eased when he mentioned that no more rate hikes are on the horizon.
DJIA 11,288.54 +73.03 (+0.65%)
Nasdaq 2,245.38 -6.08 (-0.27%)
S&P 500 1,262.90 +1.38 (+0.11%)
NYSE Composite Volume 931 mln
2-Yr Note 2.54% -0.06
10-Yr Note 3.99% unch
30-Yr Bond 4.53% +0.02
DJIA 11,215.51 -166.75 (-1.46%)
Nasdaq 2,251.46 -53.51 (-2.32%)
S&P 500 1,261.52 -23.39 (-1.82%)
NYSE Composite Volume 1.52 bln
2-Yr Note 2.60% -0.03
10-Yr Note 3.99% -0.02
30-Yr Bond 4.51% -0.04
The bulls on Wall Street were glad to see the second quarter come to an end yesterday. The bulls that have been talking up stocks in the face of tremendous economic headwinds are way too optimistic. The market will continue to trend lower as more and more companies either miss earnings expectations or give sub par guidance.
The VIX, a measure of volatility (aka fear), is no where near its March 17th level when Bear Stearns was bailed out by the Federal Reserve. The sellers have not all been washed out of the market yet because we have not seen a heavy volume down day.
Also, all the market pundits that appear on CNBC say the market will turn later this year or sometime next year. For the market (and economy) to get back on track there needs to be a catalyst to cause this reversal to occur. Unfortunately, there are so many areas of our economy that are struggling I do not think one catalyst will suffice. The one area that could turn things around is a rebound (or at least no more declines) in housing, but this is a slow process that I do not see occurring anytime soon.
Today, why did we see stocks like U.S. Steel and Potash, two big winners from the first half of the year, significantly underperform the major averages on no big news reports?
The money managers want to show their investors they knew what they were doing by owning these stocks. When the quarter ends, they either take profits or dump the stock. Then with the extra cash, they buy up the losers from the previous quarter, e.g. financials. This explains why we saw Lehman Brothers up 6% today. Nothing about this company changed from yesterday when we saw it decline 11%. Look at CIT, another financial company. This stock was up about 30% today.
Do not expect the rally in these ‘loser’ stocks to last more than a few days. We saw this same pattern at the end of the first quarter/start of the second quarter when the financials rallied (this rally lasted about a month and a half until the bad news resurfaced. By the end of the second quarter, the financials were still toxic and should not have been touched.
DJIA 11,382.26 +32.25 (+0.28%)
Nasdaq 2,304.97 +11.99 (+0.52%)
S&P 500 1,284.91 +4.91 (+0.38%)
NYSE Composite Volume 1.64 bln
2-Yr Note 2.63% unch
10-Yr Note 4.01% +0.02
30-Yr Bond 4.55% +0.02
