S&P 500 FINANCIALS INDEX has been pretty much trading sideways in the 160s for the last month. Today it rose 3 to 170 but couldn't top the 4 week high of 172½. Below is a chart showing the spectacular rise for the Alerian MLP Index, up 30 but running into resistance at 200. Today it's been sitting at 200 for most of the day, shown in the 2nd chart.
Alerian MLP Index --- 1 week
Alerian MLP Index --- 1 day
Somewhat related is the bounce back for junk bond funds. This chart is for one month at Barclays (formerly Lehman) High Yield Bond Fund. It also has an impressive rebound from overly depressed levels (up 2% today). Individual funds have seen 50+% bounces as investors reach for yields with a 2000-2500 basis point premiums over Treasury debt. Meanwhile, REITs have been stuck in the trenches. But today they had a bounce, up 8 to 150½ taking the index to the higher levels of the last 2 months. The seekers of high income are looking hard these days.
Barclays Capital High Yield Bond Fund - 1 month
Dow Jones REIT Index --- 2 months
Oil slipped pennies near 49, maxxing out on its recent run.
The Federal Reserve at their last meeting had a very depressing assessment of the economy going forward. Among other thoughts, they predicted unemployment would continue to rise into next year.
Fed Sees Longer Economic Decline Than Earlier Forecasts
Stock buyers are betting on good news coming from the stimulus package. So far congress is getting organized while the senate is a mess. Even when a bill is passed, the specter of inflation may get more attention. Already, the Treasury bond rate has jumped from an unsustainable sub 2.1% rate to 2.51% today.
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