Dow Jones Industrials --- 2 weeks
Bank stocks shot out of the gate this AM, leading the stock market gains. The S&P 500 FINANCIALS INDEX is flirting with the high from 2 days ago (& best level since early Feb).
| Value 126.16 | Change 5.41 | % Change 4.5% |
The administration is asking Congress for new powers to take over large financial institutions before they become disasters (i.e. learning from the AIG situation). While this may seem logical, it gets touchy when asking for the feds to have greater control over the economy. It's reported that Goldman Sachs (GS) is looking to repay the $10B in loans it got from the gov. The reason is simple, get Barney Frank off our back!
- Administration seeks action on financial overhaul- AP
- Goldman Sachs Said to Be in Talks to Repay TARP Funds
MLPs, REITs & junk bond funds were higher aided by the strong market. Junk bonds may be viewed in a more favorable light since they will be similar to the new junk mortgage debt with gov guarantees being sold, only without gov guarantees. VIX is down 1½ to the 41s, in the lower area of this year's range. Oil is pulling back on worries about a buildup in inventories.
| CLK09.NYM | ...Crude Oil May 09 | 5...2.65 | ... 1.33.......(2.5%) |
Home sales were up 3.7% last month. Good news, but tempered by the fact that this was still the 2nd worst month in the 45 years records have been kept. In addition, durable goods orders rose 3.4% last month. This was the first gain in 7 months & biggest in more than a year. These stories encouraged bulls today, suggesting that the sinking economy may be stabilizing.
February New Home Sales Rise Unexpectedly- AP
•Durables Orders in U.S. Unexpectedly Jump 3.4% in Biggest Gain in a Year
Berkshire Hathaway (BRK.A) debt was put on a negative outlook by S&P for its AAA rating. Further deterioration in its capital can cause S&P to lower the debt rating to AA, as did Fitch recently. AAA rated debt is a very elite group, only a handful of AAA rated companies are left.
Banks are market leaders as they should be. The S&P 500 FINANCIALS INDEX is up more than 50% from the depressed lows a few weeks ago as gov plans to create a market for junk mortgages is going over well.
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