Other than a spike up on May 8, the financial index has been pretty much flat lining near 160 in Apr & May. There is optimism that banks may have reached bottom, but constant selling of stock to raise capital has been a drag on the index.
S&P 500 FINANCIALS INDEX
| Value 161.67 | Change -1.65 | % Change -1.0% |
MLPs are having their day of reckoning with a 5 point drop. This is an index with a low beta, even during the last 6 months. A 5 point drop is significant. Of course, this can be justified & expected following its recent runup. REITs & junk bond funds also slipped, but more in line with the market decline.
Alerian MLP Index --- 2 weeks
Oil is down ahead of the weekly Wed inventory report.
| CLN09.NYM | ...Crude Oil Jul 09 | ...67.80 | ... 0.75.......(1.1%) |
Ben Bernanke, Federal Reserve Chairman, warned that rising U.S. debt was contributing to a spike in longer-term interest rates & now was the time to start working on reining in deficits. He gave no indications if the FED would step up purchases of gov debt or mortgage-backed securities. Treasury bonds rallied,the yield on the 10-year Treasury fell 7 basis points to 3.58%.
•Bernanke Warns Long-Term U.S. Budget Deficits Threaten Financial Stability
Another gloomy estimate for job losses. ADP said over ½M jobs were lost in May. This is a dreary number which will probably be followed by an even worse number for Jun when layoffs from the post GM bankruptcy are included.
ADP Estimates US Companies Cut Payrolls by 532,000
Mention about the need to reduce gov deficits, at unimaginable levels, plus a dreary jobs report can take down any "overbought" market. And the 8776 ceiling remains intact. More attention is being paid to the aftermath of the market's recent rally. A lot of stock & bonds (especially junk bonds) are coming to market & markets look to be having difficulties absorbing the added supply.
Dow Jones Industrials --- 3 months
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