VerySmartInvesting: Markets end week on a whimper

Friday, May 22, 2009

Markets end week on a whimper

Selling into the close cost the markets gains they held during much of the day. Dow dropped 15, advancers ahead of decliners 3-2 & NAZ fell 3. Dow's gain for the month is less than 200 & that's due to a May 1 rally. Banks, the market leaders, just muddled along:

S&P 500 FINANCIALS INDEX

Value
156.09

Change
-1.72

% Change
-1.1%

In light trading, price moves don't mean much. The Alerian MLP Index had a .14 gain (at these high levels, they're still entitled), REITs were soft & junk bond were mixed. Treasuries had a very bad day. The 10 year Treasury dropped sharply, sending the yield up to 3.45%. This chart shows the rise in yields in 2009 (put a decimal in between the 2 digits). The hike in yield will be seen in mortgage rates shortly.

10-year Treasury Yield Index - YTD

Traders took oil higher betting on favorable driving numbers for the first weekend of driving in the summer season. Expectations are for a 1½% increase, but that is off a depressed level last year.

CLN09.NYM

..Crude Oil Jul 09

..61.46

0.41
.......(0.7%)

California led the country in job losses for Apr, losing almost 64K jobs sending their jobless rate to 11%. There was no new news about California's budget crisis, but they are getting desperate. The muni market has been helpful, bond prices have been rising (reducing yields or costs to the issuers). But California is facing a whopper size problem. Speaking of enormous financial problems, GM execs won't be getting time off this weekend. Expectations are that their fragile situation could drag on to the last minute on May 31.