S&P 500 FINANCIALS INDEX
| Value 162.23 | Change -1.17 | % Change -0.7% |
MLPs are flat, resting at their yearly highs. The graph below is for an ETF started by JPMorgan earlier this year to track the Alerian MLP Index (for those who want to participate in a basket of of MLPs). Today it's unchanged. The Dow Jones REIT Index dropped 1, just sloshing around in the 120s. Junk bond funds are little changed at or near their yearly highs. The VIX, volatility index, is flat in the high 23s, yet another low for 2009. The decline in VIX mirrors the growing acceptance of greater risk seeking out high yield securities. The 10 year Treasury bond slipped a little, taking the yield up 3 basis points to 3.51%
AMJ (ETF) --- 6 months
Oil sold off (but higher in the last few minutes) ahead of the weekly inventory report coming out shortly. Those who bought a couple of weeks ago in the high 50s are still happy campers.
| CLU09.NYM | ...Crude Oil Sep 09 | ...65.22 | ... 0.39 .......(0.6%) |
Boeing (BA) & Pfizer (PFE), 2 Dow stocks, reported muddy kind of earnings. After making adjustments they were sort of OK. BA fell 19¢ while PGE is up 64¢.
- Boeing profit climbs in 2Q on strong defense sales- AP
- Drugmaker Pfizer's earnings fall 19 percent- AP
CIT (CIT) drama plays on. They paid high fees to get access to more money 2 days ago which is raising eyebrows. The bondholders who put up $2B bailout money got a fee of $100M for their effort. In addition, CIT had to put up a lot of collateral. The bonds that CIT wants to buy back at 82½¢ on the dollar is trading at that price presently. CIT's future remains uncertain, a negative for the markets.
•CIT Rescue Gives Pimco, Centerbridge Instant, Risk-Free $100 Million Gain
There is a story about how investors are accepting greater risk to go after greater rewards. The focus is on the global economy, with more interest in securities of growing Asian countries. This general feeling is what is in play in the US with more interest in high yield securities. The problem is that interest is fickle, it ebbs & flows.
•Investors Are Embracing More Risk With Preference for Asia, Survey Shows
The word stabilize or stabilization is thrown around a lot to signify that the recession is bottoming. Most would agree that the economy has ended its free fall period, but that does not necessarily signal the economy will come roaring back. Those talking about "good" earnings reports usually refer to earnings beating lowered estimates, but below last year. Wells Fargo (WFC) & Morgan Stanley (MS) reported mushy earnings today, sending the stocks lower. I think these reports are more representative of the real story about how well companies performed in Q2.
Dow Jones Industrials --- YTD
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