Markets begin the quarter with an advance

Dow was up 70, advancers over decliners 5-2 while NAZ added 4. Stocks were strong going into the close. ahead of a long weekend. Banks had a good day. For months late in 2009 & early in 2010, the Financial index had been lagging behind the markets. It looks like the index has returned to lead the advance.

S&P 500 FINANCIALS INDEX

Value 216.74

Change 1.99

% Change 0.9%

MLPs are back in demand, the index was up 2.85 to the 306s, another new 2½ year high. New highs bring the yield on the index below 7% & the yield spread over the 10-year Treasury to 300 basis points. That spread compensates investors for the added risk of owning these partnerships. The REIT index gained .78 to 199 with an impressive 8% gain YTD. I posted an instablog at Seekingalpha today talking about my feelings on the increased speculative quality for REITs. Junk bond funds were stronger bringing down their yields & narrowing their spreads over the rate on the 10-year Treasury. The yield on that 10 year Treasury bond rose 3 basis points to 3.87%. It has not been able to move up into the very worrisome area above 4%, so far.

Alerian MLP Index --- 3 months




DJ REIT Index --- 3 months





Oil is hot again, looking to go over 85 which is a key barrier. Gold is also doing well going into a long weekend.

CLK10.NYM

..Crude Oil May 10

..84.91 T

.. 1.15 ......(1.4%)

GCJ10.CMX

..Gold Apr 10

..1,124.50

.. 11.20 ......(1.0%)

Photo: Bloomberg


Incentive wars by auto companies brought out car buyers. Toyota's (TM) generous rebates & low-interest financing to counter safety-related recalls forced rivals to respond. Toyota Mar sales surged 41% with sales of almost 187K autos. GM reported a 21% jump in new vehicle sales while Ford's (F) climbed nearly 40% & Honda rose 23% over last Mar, when economic uncertainty & rising unemployment kept buyers from showrooms. Sales at Hyundai & Subaru also rose, but Chrysler continued to struggle with sales down 8%. The sales gains look great, but coming off depressed levels last year limit their usefullness for forecasting business in 2010. Toyota's troubles are fading, their chart shows that investors are forgiving.


•GM, Ford, Toyota Boost U.S. Vehicle Sales on Incentives in `Rough' Market


Toyota --- 2 years





Markets had a fairly good day even though NAZ did not participate as it should have. Dow made another yearly high but still short of the magical 11K ceiling. There is talk about releasing the important jobs report tomorrow, when markets are closed, was politically motivated. Maybe, but I don't think so. It just happened to fall on the first Fri of the month. It looks like markets today were betting on a favorable jobs report. But it probably will not give any clearer indication on the recovery. And it will be tougher to analyze with some of the jobs going to workers on the census, which are really just temp jobs.

Dow Jones Industrials --- 3 months

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