Wobbly day, wobbly week, but good July for stocks

Stocks were near break even for much of the day & ended little changed. Dow lost 1, advancers over decliners better than 3-2 & NAZ was up 3. Volume was light, typical of Fri in the summer. The Financial Index also had a gain, but it has been under 200 for more than 2 months.


S&P 500 FINANCIALS INDEX

Value	197.92
Change	-0.05 (-0.0%)

MLPs rebounded very strongly in the PM, including Enbridge Energy (EEP) which is cleaing up its oil spill into Lake Michigan. The index rose 5¼ to the 328s, recovering a good portion of its weekly loss & only 6 off its 335 high (at the start of the week). The Dow Jones REIT Index gained 1+ to the 206s & junk bond funds were also higher. The VIX slipped a fraction remaining near 24. Treasuries rallied sharply as they view the GDP news as bullish for their cause. The yield on the 10-year Treasury bond plunged 9 basis points to 2.91%, close to its recent lows. These low yields are troubling for the stock markets. The € is back at $1.30½. The graphs below are for the last year to give a longer term perspective of where they have come from.


Alerian MLP Index --- 1 year




Dow Jones REIT Index --- 1 year




VIX --- 1 year




10-Year Treasury Yld Index --- 1 year




Oil is still in the higher portion of its trading range over the last year. Gold finally found buyers who would like to take it back over 1200.

CLU10.NYM

..Crude Oil Sep 10

..78.85

.. 0.49 ......(0.6%)

GCQ10.CMX

..Gold Aug 10

..1,181.40

.. 13.00 ......(1.1%)

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Analysts concluded that the recovery is losing so much momentum that employers are unlikely to step up hiring anytime this year & unemployment could return to double digits. Economic growth crawled at a 2.4% pace in the spring, the economy's weakest showing in nearly a year. Many think growth is even slower now. Consumers spent less, companies slowed their restocking of shelves & the nation's trade deficit exerted a stronger drag on the economy in Q2. The economy is heading into Q3 with little momentum & about everything tracking weaker. However, the one exception is in equipment & software with companies investing in those areas last qtr at the fastest pace in 13 years & that's expected to continue. Of course, larger investments in technology can crimp the need to hire more workers!

• Recovery Loses Speed as Consumers Turn Cautious- AP

Enbridge Energy (EEP), a prominent MLP, was ordered to take “corrective action” before it will be allowed to reopen its 268 mile pipeline. “Prior to resuming operation of the section of Line 6B pipeline segment,” according to the order issued by the Department of Transportation issued July 28. Enbridge must “submit a written restart plan for prior approval.” A press briefing will be held this PM to give an update on the situation.

Enbridge Ordered to Take `Corrective Action' Before It Can Restart Line


Enbridge Energy --- 1 week





Despite a dismal ending, Jul was a pretty good month for stocks. They started near the lows of their short term cycle. Dow gained almost 700 & the MLP index added 20, bringing it close to 343 (needed to set another record). Junk bonds also rose, but not in spectacular fashion. Next week will bring the auto sales for Jul which should be weak & the jobs report on Fri.

Dow Jones Industrials --- 1 year

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