With today's rally, the Financial Index is near the upper end of its trading range for the last 2 months. Another way to look at it is this a 10% rally in 5 trading days, although the index pulled back 1 in the last hour.
S&P 500 FINANCIALS INDEX
| Value 165.07 | Change 6.51 | % Change 4.1% |
Alerian MLP rose 4.63 t6 the 233s, taking to its 2009 high achieved a couple of months ago. It's had a 20 point gain in the last 3 weeks. The REIT Index was up 4½ but continues in its sideways range. Junk bonds were strong while the VIX, volatility index, is in the 25s, low for the year. Money for buying came from selling Treasuries, the yield on the 10 year Treasury shot up a huge 15 basis points to 3.60% (up 30 basis points this week).
Alerian MLP Index --- YTD
Oil had a big gain on the weekly inventory report showing inventories fell & the weaker dollar. Foreign oil buyers view oil as as a safe haven from inflation.
| CLQ09.NYM | ..Crude Oil Aug 09 | ..61.72 | .. 2.20......(3.7%) |
UAE said that U.S. Treasury Secretary, Timothy Geithner, reassured them about the stability of the dollar during his visit today. Geithner told Al-Arabiya Television that the US remains “committed to a strong dollar” & pledged yesterday in Saudi Arabia that the US would take steps to rein in its borrowing. Saudi Arabia & the U.A.E. are the 4th largest holders of Treasury debt.
UAE Reassured on Dollar by Geithner Visit
The Federal Reserve sees unemployment going over 10%, hardly any great surprise, & said it could be 5-6 years before the US economy becomes healthy again (ignored in today's rally).
Fed: Unemployment Will Top 10 Percent This Year- AP
Last Fri, the Dow was sitting at 8.1K, life was looking dreary. In half a week, it shot up 500 points. The major news was the first wave of earnings which encouraged buyers. Sudden market changes without fundamental reasons worries me.
Dow Jones Industrials --- 2 weeks
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