Wednesday, December 9, 2009

Mixed markets again looking for direction

Dow rose 30, decliners ahead of advances 4-3 & NAZ was flat. Banks turned around, taking the Financial Index into the black.


% Change

The Alerian MLP Index gained almost 1 to the 270s, pretty much taking out the false high for 2009 in late Oct. The Dow Jones REIT Index was up 1+, having weathered the financial storm of the last few days pretty well. Junk bond funds are mixed to higher. The yield on the 10-year Treasury bonds was down 1 basis point to 3.38% ahead of an auction for 10 year bonds at lunchtime.

Alerian MLP Index --- 2 weeks

Dow Jones REIT Index --- 2 weeks

Volatility in commodities has also calmed with modest changes for oil & gold.

CLF10.NYM...Crude Oil Jan 10...73.02 ...Up 0.40

GCZ09.CMX...Gold Dec 09...1,140.30 ...Down 2.50

Treasury Secretary Geithner announced the administration will extend the gov's financial bailout program (TARP) until next fall because the extension is "necessary to assist American families & stabilize financial markets." In addition the Troubled Asset Relief Program (TALP) that Congress passed in Oct 2008, will be extended until Oct 2010. "The recovery of our financial system remains incomplete," Geithner told Congress. "And, near-term shocks to that system could undermine the economic recovery we have seen to do." He claims that the bailout fund will be limited to 3 areas : (1) stepping up efforts to curb record-high home foreclosures, (2) providing capital to small banks which play a crucial role in providing credit to small businesses & (3) the gov may boost its commitment to a program aimed at sparking lending to consumers & small businesses. Of course Congress will view this money as a slush fund for pet projects.

Geithner Extends $700 Billion TARP Bailout Program Until October of 2010

Greek debt is getting to be a major problem in the world after yesterday's downgrade to marginal investment grade. The yield on the 10-year Greek note shot up 16 basis points to 5.51%. The two-year note yield jumped 20 basis points to 2.94%, its yield soared 66 basis points yesterday for the biggest increase in 11 years. The prime minister said, "We’re moving swiftly to reassure citizens & markets that we’re moving in the right direction,"

Greek 10-Year Bonds Decline as Fitch Says Government Doesn't Grasp Crisis

Dubai & Greece are moving to ease worries about their debts. Recent announcements by the FED & Treasury are what markets had expected. Maybe markets are learning to adapt.

Dow Jones Industrials --- 2 weeks

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