S&P 500 FINANCIALS INDEX
| Value | 199.69 | |
| Change | 0.91 (0.5%) |
MLPS are taking a rest this week after a nice run recently. The index fell a fraction to the 304s, still up 19 YTD. The Dow Jones REIT Index was up ½ to the 207s. Junk bond funds were flattish. The VIX, volatility index, dropped 1½ to the 23s. It's been having a significant retreat while gold is hitting record highs! Treasuries sold off, the yield on the 10-year Treasury bond rose 4 basis points to 3,23% (but remaining in low territory).
Alerian MLP Index --- 2 weeks
Dow Jones REIT Index --- 2 weeks
VIX --- 2 weeks
Oil was essentially flat but gold took off, setting another record going over 1260. Gold is heading for its 10th consecutive annual increase, best performance in 90 years. Gold buying comes from beliefs that debt cutting measures in Europe will slow growth in Europe & the US.
| CLN10.NYM | ...Crude Oil Jul 10 | ...76.87 | ... 0.08 .......(0.1%) |
The European Union will publish the results of tests that check the stability of banks using stress tests. The results were not initially meant to be made public, but after some countries said they would do so to quell rumors of banking problems, the EU agreed to act in unison. The move was seen as a vote of confidence in the financial sector. Asked how the govs would react if the tests revealed shortcomings, Angela Merkel, German Chancellor, said the EU has “taken precautions,” including a €750B ($928B) financial backstop. When the US carried out similar stress tests over a year ago, it pledged to provide capital to banks that couldn’t raise it. The EU still hasn’t disclosed details of its tests, including whether they include a sovereign debt restructuring, raising concerns they may not be stringent enough.
EU Stress Tests Face Investor Questions on Stringency
Photo: Bloomberg
CVS Caremark (CVS) & Walgreen (WAG), WAG is a Dividend Aristocrat, settled a contract dispute that could have prompted thousands of WAG customers to search for a new place to fill prescription drugs. The companies had been negotiating for months & earlier this month said they would end their partnership. That partnership allows people whose prescription drug benefits are handled by Caremark to be reimbursed for prescriptions filled at Walgreen's pharmacies. WAG has more than 7,500 outlets & wanted to be paid more for filling prescriptions. Each stock gained 1+ on the news.
CVS Caremark, Walgreen Agree on Drug Plans
CVS Caremark --- 2 years
Walgreen --- 2 years
The € reached $1.24 but fell back to $1.23½. Strength in the € could be bringing out stock buyers, but that's hard to figure today. Stress tests for European banks are designed to make investors feel better but also add to uncertainty. Congress is enjoying an opportunity to beat up on helpless BP (BP) execs even though this theater is not getting anything done. With 4 kinds of options expiring today, anything is possible. But lately, these option expiration days have not provided a lot of excitement.
Dow Jones Industrials --- 2 weeks
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