Friday, August 13, 2010

Markets move little on light trading

Stocks didn't stray far from break even all day on very light volume (maybe 0.7B shares on NYSE floor), but there was some selling at the close. Dow fell 16, advancers & decliners were about even & NAZ was off 16. The Financial Index just slipped a little.


Value189.09One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change-0.61 (-0.3%)

The Alerian MLP Index had a significant rebound (up 5¾ to 322) reducing the loss for the week to 11. But that's still a big loss for a group that used to be associated with a low beta. The REIT index was flat at 200½. Junk bond funds were generally higher while the VIX barely changed in the 25s. The yield on the 10 year Treasury bond dropped another 5 basis points to 2.68% & looks like it wants to test the ugly days early last year when it was just above 2%. The 2 year note has already reached new record lows. The stronger dollar hurt the €, down another ½ penny to $1.27½

Alerian MLP Index -- YTD

Dow Jones REIT Index -- YTD


Dow Jones REIT Index -- YTD

At lunchtime, an oil trader said while he's bullish on oil reaching 90, but he's not expecting major moves until the heating season begins in a few months. Meanwhile, oil is at a 1 month low. Gold has been has been hurt by the dollar's rally so it's floating, but does have excellent prospects over the long term.

CLU10.NYM..Crude Oil Sep 10..75.47..Down 0.27

GCQ10.CMX..Gold Aug 10..1,213.50 ..Down 0.80

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General Motors has delayed its IPO filing until early next week to update its prospectus with the recent CEO change & a management risk factor. The filing had been schedule for today. The several-hundred-page prospectus will not provide the number of shares to be sold or the pricing range but will cite the bankruptcy, steps completed in restructuring, financial projections, details of ownership & a large set of risk factors. By filing initial paperwork with the SEC next week, GM is aiming to complete its IPO in late Oct or Nov. A successful IPO could be the largest ever in the US market. GM secured a $5B credit facility this week clearing the last remaining hurdle toward making the gov a minority shareholder.

Low rates on Treasury debt can cause major headaches for stock markets:

Treasury BONDS

U.S. 3-month
U.S. 2-year
U.S. 10-year
U.S. 30-year

Many traders took off early for a long weekend. Volume was very light & little was accomplished in the markets. Maybe next week!

Dow Jones Industrials -- YTD

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