Wednesday, January 13, 2010

Stocks stall while looking for direction

Markets are stumbling as they try to figure out what direction earning releases will take them. After starting lower Dow is up 20, advancers & decliners are even & NAZ is up 2. Banks are under pressure from the new tax/fees being proposed. But buyers are cautiously returning to give the Financial Index a slight lift.


% Change

The Alerian MLP Index is off 4, one of its biggest losses in a long time. But after its run, its entitled to a rest. The Dow Jones REIT Index is up 1½ in the 181s (it's former high from Sep 09). The chart shows that level has to decide whether it will be a floor or a ceiling. Junk bond funds are flattish. The yield on the 10-year Treasury bond is back up 2 basis points to 3.74% following the big decline yesterday. Fears have eased considerably in the markets. The VIX, Volatility Index, is little changed in the 18s, a level not seen in 19 months.

Alerian MLP Index --- 2 weeks

Dow Jones REIT Index --- 2 weeks

VIX --- 2 weeks

Oil fell below 80 as freezing temps are losing their grip around the world. Gold is up a notch but still off its interim high of 1150 earlier this week.

CLG10.NYM...Crude Oil Feb 10...79.35 ...Down 1.44

GCF10.CMX...Gold Jan 10...1,133.30 ...Up 4.40

Gold, Silver, Platinum...W.T.F.?! Click Here

Demand for loans to purchase a home only rose marginally in the first week of 2010. However, mortgage applications rose, reflecting increased demand for home refinancing loans with a drop in interest rates. The Mortgage Bankers Association (MBA) said its index of mortgage applications, including both purchase & refinance loans, increased 14.3% to 528 for the week ended Jan 8 (compared to 1,324 last year). The 4-week moving average of mortgage applications was down 6.4%. The increase in weekly data is viewed as part of the ebb & flow, not significant in the big picture. The refinance share of increased to 71.5% from 68.2% in the previous week. The adjustable-rate mortgage (ARM) share of activity was unchanged at 4.0% from the previous week. However tight lending standards remain in place & are a big obstacle. Real estate is still hurting very badly.

Photo: Bloomberg

Investors are forecasting gains in 9 key countries for the first time since the data began in 2007. The sentiment measure for the Standard & Poor’s 500 Index climbed 35% to 54.37, only the 2nd time the reading exceeded 50. Participants in the survey are signaling they anticipate a rally in the next 6 months. The MSCI World has rebounded 74% from a 13-year low in Mar. Contrarians will view this as a sign for markets to pull back.

Investors Turn Bullish on Stocks From U.S. to Japan on Economy

Markets are doing little awaiting more earnings news. Morgan's release on Fri will set the tone for banks. Stocks will probably keep sloshing around today without any stimulus.

Dow Jones Industrials --- 2 weeks

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