Thursday, June 17, 2010

Markets see-saw on sluggish economic data

Stocks sank at the opening & remained under water until buying in the the last half hour. Dow closed up 24, advancers & decliners were even while NAZ eked out a 1 point gain. Congress is trying to make itself feel good grilling oil execs but is not accomplishing much beyond getting attention in the press. Their questions did little to encourage the markets. Bank stocks saw buying into the close which limited the loss for the Financial Index.


Value198.78One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change-0.28 (-0.1%)

The Alerian MLP Index dropped a ½ to 305 & has been pretty much flat for a few days after having a nice run off its lows a few weeks ago. The REIT index was up a fraction in the 206s. Junk bond funds were up modestly, typically less than 1%. Treasuries were strong as was gold, safety is back in vogue. The yield on the 10-year Treasury bond fell 9 basis points to 3.19%, very near its yearly lows reached a few weeks ago.

Alerian MLP Index -- 2 months

Dow Jones REIT Index -- 2 months

VIX --- 2 months

Oil fell in sympathy with lower stock markets earlier in the day. It's still above 75, a key support level for bulls. But that's fragile. Gold touched a record high of 1254 before settling back to 1245. Nervous investors are flocking to gold & there are a lot of nervous investors while stocks have put in a rebound off recent lows.

CLN10.NYM..Crude Oil Jul 10..76.54 ..Down 1.13

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U.S. automakers surpassed foreign brands for the first time in a survey measuring the quality of new cars & trucks. J.D. Power said that owners of vehicles made by Detroit automakers reported fewer problems on average during the first 90 days of ownership than those built by companies based overseas. Wow!! It was the first time that has happened in the 24 years the study has been conducted. Ford Motor (F) showed some of the biggest gains in quality among individual brands, moving into the 5th spot. Porsche was the top scorer. Toyota Motor (TM), which has suffered through huge safety recalls earlier this year, saw its score drop. The study ranks vehicles according to the number of problems reported per 100 vehicles. The overall average for the industry was 109 problems per 100 vehicles. That industry average has fallen steadily over the past decade. US manufacturers scored an average of 108 problems, while foreign companies posted 109 problems. That is a marked difference compared to 10 years ago, when import brands had far fewer initial problems than those made by US companies. Ford was the best scorer among non-luxury brands, with 93 problems per 100 vehicles & it has shown steady improvement over the last 9 years. Toyota's ranking dropped to the 21st spot, down from the 6th ranking in 2009.

Toyota Plunges to 21st in Auto-Quality Survey; Ford Makes Top 5

Pimco, the world’s biggest private owner of bonds, boosted holdings of US gov related debt to the highest since Nov. The Total Return Fund, with $228B in assets, increased gov debt holdings to 51% in May from 36% in Apr. Bill Gross, co-chief investment officer, said 2 weeks ago, "The US is the least dirty shirt." "The world is full of dirty shirts in terms of excessive debt, and the United States is one of those countries, but it still remains the reserve currency and still remains the flight-to-quality haven."

Pimco's Gross Increases U.S. Government Debt to 6-Month High

Big, brave Congress people enjoy beating up on BP exces. It gets a lot of attention in the press & makes people back home feel good that they are doing their job. Meanwhile, the mess in the Gulf gets worse because they don't know how to solve that problem & refuse to allow in foreign ships using foreign workers. Their priorities are wrong! First plug the wells & clean up the mess, then hammer on BP (BP)! Oh well. The € edged up getting near $1.24, a nice gain off recent lows. But dreary fundamentals remain in place, the countries are spending more than they take in requiring them to keep borrowing. Dow has been rising this week, up more than 200. There is the nagging problem that these gains have come while Treasuries have been strong & gold reached another record. Both can not be winners simultaneously!

Dow Jones Industrails -- 2 months

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