Wells Fargo (WFC), one of Berkshire Hathaway's big investments, rose 3.89 (24%) on what was considered a good report. They are a big home lender, which was responsible for their first loss in 8 years. The Wachovia acquisition also was a drag. But the stock gained 3.54 (20%) when WFC maintained the dividend & added it won’t need more federal aid.
•Wells Fargo Has First Loss Since 2001; Shares Jump as Bank Keeps Dividend
Their announcement lifted all bank stocks as shown below:
S&P 500 FINANCIALS INDEX
| Value 135.67 | Change 12.83 | % Change 10.4% |
The Federal Reserve will issue a statement from their meeting this PM, but there is no room left for rate cuts. The FED will probably discuss their ideas about keeping (absorbing) bad loans. That idea is political & is difficult to evaluate. Even more than usual, what they say will move the markets.
The Alerian MLP Index continues on its recovery road. Oil is little changed, so they must be responding to the general favorable sentiment in the markets.
Alerian MLP Index --- YTD
The Dow Jones REIT Index is up (up 4 today) from its 120 low last week, but that's not saying much. Barclays Capital High Yield Bond ETF is up 50¢ today, high yield bond funds are in demand. YTD it's up only modesty but individual junk bond funds are typically up 15-25% (again from a depressed start). Even after their gains in 2009, 15-25% yields are common. The VIX, volatility index, is down 2 to 40. After a big rise in the last couple of weeks, it's pulling back on easing fears. However in the old days (more than 6 months ago), 20 was considered very high and mid 30s was the stratosphere:
VIX --- YTD
The house is expected to vote on the whopper stimulus package. Then it will go to the senate where the Reps will put up some fight, they're looking for more tax cuts. The good news is they're working on the bill, but the bad news is don't hold your breath.
•House Set for Vote Today on $816 Billion Stimulus, Moving Debate to Senate
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