Markets little moved by favorable a GDP report

Dow only managed a small gain on a smaller than expected decline in GDP for Q2. Dow was up 27, advancers ahead of decliners 3-2 & NAZ added 5 (but is still under the important 2K line). The Financial Index remains near the 175 peak seen in May.

S&P 500 FINANCIALS INDEX

Value 173.01

Change -0.35

% Change -0.2

The Alerian MLP index has been hobbling along this week after a 40 point gain in the prior month. Today it's up fractionally to the 246s. REITs & junk bonds only had minor changes but Treasuries rallied. The yield on the 10-year Treasury bond dropped 9 basis points to 3.56%.

Alerian MLP Index --- 2 weeks




With the gain, oil is back to where it started Wed AM (prior to its big tumble). 73 is the interim high it may be going after.

CLU09.NYM

...Crude Oil Sep 09

...67.62

... 0.68 .......(1.02%)

The economy shrank at a 1% annualized rate in Q2, a better-than-expected showing. The dip follows an economy in free fall, tumbling at an annual rate of 6.4% in Q1 (the sharpest slide in nearly 3 decades). The economy has contracted for a record 4 straight quarters, underscoring the grim toll on consumers & companies. Higher spending by gov & less drastic spending cuts by businesses along with an improved trade picture were behind the better performance. Consumers, though, pulled back as rising unemployment, shrunken nest eggs & lower home values weighed down spending.

The Commerce Dept also reported that the recession inflicted even more damage on the economy last year than previously thought. It now estimates that the economy grew just 0.4% in 2008, much weaker than the 1.1% growth originally reported.

•U.S. Economy Shrinks at 1% Annual Rate; Spending Falls More Than Estimated


The Cash-for-clunkers program by the gov is one of their rare successful ones, in fact too successful. The idea is that a consumer can trade a car in for a more fuel efficient one. In just the first week of the program (it has 3 more months to run) the $1B budget has been depleted. Congress is trying to add a $2B extension, prompted by auto producing states.

• Cash for clunkers may go on hold- CNNMoney

Following 2 sluggish months, Dow had an excellent Jul, gaining over 800 (10%) to a new 2009 high. Earnings reports were the drivers, mediocre earnings that beat expectations were considered excellent. The high yield sectors, especially MLPs & junk bonds, have benefited greatly from this rally.

Dow Jones Industrials --- 3 months