S&P 500 FINANCIALS INDEX slipped from its high, ending up 2 (but off 5 from the high). VIX after being down much of the day, ended even in the 44s. The Alerian MLP Index finished with a 1½ point gain (down 5 from the high of the day) while REITs & junk bond funds were lower. The Dow Jones REIT Index dropped 5+ taking it just under the important 100 level.
Dow Jones REIT Index --- YTD
Barclays Capital High Yield Bond ETF is representative of the junk bond fund market. Junk bonds had a nice run off overly depressed levels. Yields of 20-30% attracted buyers late last year & into Jan. But enthusiasm waned this month. This ETF pulled back 10% in the last 2 weeks & is off 20% from its highs last month. Individual junk bond funds fared worse, driving yields back into the 20+% area.
Barclays Cap High Yield Bond ETF -- 2 weeks
Oil was strong after yesterday's weekly inventory report, but remains near multi years lows. Gold couldn't handle 1000 a few days ago, it's now down 6% from those highs.
| CLJ09.NYM | ..Crude Oil Apr 09 | ..45.22 | .. 2.72......(6.40%) |
| ZGH09.CBT | Gold 100 oz. ..Mar 09 | ..943.00 | .. 22.50......(2.3%) |
There are new worries that the "stress test" applied to banks could have unintended consequences. More gov meddling might encourage banks to pull in their horns (make even fewer loans). In the "making it as we go along" atmosphere, it's risky to guess how changes will play out. Many of the biggest banks subject to the stress test have familiar names. But new names will be included such as Goldman Sachs (GS), Morgan Stanley (MS) & American Express (AXP).
Problem banks are another worry to deal with. So far, according to FDIC, 14 banks have failed & the number on the problem list with the potential to fail is 252, up from 171 in the prior qtr. These tend to be smaller banks with weaker finances. A string of failures would be one more kick in the head markets don't need.
- Problem bank list keeps growing- CNNMoney.com
The Pres wants to impose higher taxes on the very rich as a way to help finance whopper sized gov spending. Such moves are popular with the masses, but doesn't play well with business leaders (especially those who are part of the very rich). Today's proposals represent a shot across the bow, but is not welcome by many investors.
•Obama Seeks $1 Trillion Tax Increase on Highest-Paid Americans, Companies
The chart below shows The Dow is operating on a lower tier. 8K seems a long way away!
Dow Jones Industrials --- YTD
Dell (DELL) reported lower sales & earnings after hours. The stock was down pennies based on the gut reaction. It will help set a negative tone for Asian markets opening in a few hours.
Dell 4Q profit dives, recession stunts tech spendAP(Thu 4:25pm)
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