Markets recovered some of the losses from Mon. Dow rose 270, advancers ahead of decliners 3-1 (mild all considered) while NAZ gained 52. S&P 500 FINANCIALS INDEX jumped 11 to 152, the Alerian MLP Index was up only pennies at 163, the Dow Jones REIT Index rose 14 to still a very depressed 120. The VIX (fear index) dropped 5½ to 63, remaining in the stratosphere.
Oil keeps falling to lowest levels in 3 years:
CLF09.NYM Crude Oil Jan 09 .... 47.60 .... down 1.68 (3.4%)
If there was any rationale behind the gains, aside of recovering from Mon's losses, Ford (F) announced it did not really need an auto bailout to survive (at least for a few years) & the General Electric (GE) announcement that they would continue the div next year.
News at the macro economic level continues gloomy.
•Treasury 30-Year Yield Falls to Record on Speculation Fed Will Buy Debt
•GM, Ford, Toyota November U.S. Sales Tumble More Than 30% Amid Recession
Yields on the Treasury 10 year bond are 2.69%, a record low yield due to increased demand for the bonds especially if the Treasury starts buying bonds. No surprise about Nov auto sales with the 13th consecutive month of lower sales (year over year). By way of perspective, after averaging 17MM annual sales in this decade, they have dropped to an annual rate in the 10s. Toyota is feeling the pain with a sales decline of 32% in Nov to the lowest level in 8 years. Even with Ford's announcement, GM maintains it needs money THIS MONTH or else. There are no shortage of problems, more bleeding is coming.
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