Bleak housing data did not bring back bears

Markets couldn't decide what to do following the big & unexpected rally yesterday. Dow was flattish but selling in the last hour brought a loss of 29 at the close. Internals were stronger with advancers over decliners 3-2 & NAZ was up 2. Banks led again, this time in a downward direction.

S&P 500 FINANCIALS INDEX

Value 161.39

Change -4.33

% Change -2.6%

The MLP index was up 1.67, bringing it within a couple points of the 218 high set 2 weeks ago. The chart gives a 2 year history, including the all time high (243 in Jul 2007) & the more recent lows. Given the competition, not too bad a performance. The yield for the index is 9.6% (down from a high of 15% last Nov). The index was 215 last night, a comparable Alerian index WITH REINVESTED INCOME was 544, also starting at 100 in Dec 1995.


Alerian MLP Index --- 2 years




REITs continue their choppy but sideways trading pattern. Overhanging this group is the threat of more tenant problems. I see a lot of "for rent" signs around here & the threat of more signs going up is a major worry. Junk bond funds were higher today. However, the danger of more bond defaults is not going away soon. The VIX, volatility index, keeps declining, now to the 28s, explaining the increased appetite for high yield securities (despite greater risks).


VIX ---- 1 month





Oil is pushing hard on the 60 ceiling again. The national average fuel price for gas is up to 2.31. One month ago it was 2.06 & a year ago the country was looking at 3.79. High prices in a country trying for an economic rebound will hurt.

CLM09.NYM

..Crude Oil Jun 09

..59.65

.. 0.62 ......(1.1%)

	Regular	Mid	Premium	Diesel	85	**E85 MPG/BTU adjusted price
Current Avg.	$2.314	$2.458	$2.546	$2.292	$1.915	$2.520
Yesterday Avg.	$2.311	$2.454	$2.542	$2.292	$1.923	$2.531
Week Ago Avg.	$2.248	$2.388	$2.473	$2.276	$1.896	$2.494
Month Ago Avg.	$2.057	$2.185	$2.262	$2.276	$1.768	$2.327
Year Ago Avg.	$3.794	$4.030	$4.175	$4.522	$3.170	$4.171

source: AAA



Home Depot (HD), Dow stock, reported sort of decent earnings but they did not alter the outlook for 2009 (more dreary news ahead). The stock fell 1.39.

•Home Depot 1Q profit rises on fewer charges


This was another day when little was decided in the markets. Auto companies had a meeting with the president aimed at producing cars with better mileage & lower emissions, something everybody is in favor of. General Motors (GM) is coming down to the wire, their clock keeps ticking. But the union hangs tough despite the dismal outlook for GM.

Auto Workers Say Talks With GM Have ‘Long Way to Go’


Dow Jones Industrials --- YTD