Thursday, September 30, 2010

Dow has best September in 71 years

This is statistically the worst month for the stock market, but not in 2010.  The Dow was up in Jul, down in Aug & up again in Sep for a total gain of 10% (off one of its lowest levels in the last year).  Today, Dow slipped 47 (from selling into the close), advancers & decliners were even while NAZ fell 7.  The Financial Index (composed primarily of bank stocks) was up 11 for the month but far off the yearly highs of 230 & very far under the 500+ record levels 3 years ago.


Value193.18One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change 0.21  (0.1%)

The Alerian MLP Index gained another 1+ to the 337s, just 6 away from setting a new record high.  The REIT index was up a tad today at 210+ & also had a good month (although far short of record levels). Junk bond funds were flattish today but up around 5% in Sep. The € was little changed today at $1.36 & gained 6¢ in the month.  Treasuries were flat but at elevated levels all month with record low or near record low yields. Treasury yields were little changed today.

Treasury yields

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

Alerian MLP Index   ---   1 month

Dow Jones REIT Index   ---   1 month

10-Year Treasury Yld Index   ---   1 month

Oil had its biggest monthly gain since May 2009, after economic indications that demand for oil may improve.  Gold, what is there to day??  It topped 1300 & wants to go higher. 

CLX10.NYM...Crude Oil Nov 10...79.95 ...Up 2.09  (2.7%)

GCV10.CMX...Gold Oct 10...1,306.20 ...Down 2.30  (0.2%)

$$$Gold Super Cycle$$$ 

Oil  (ETF)   ---   1 month

GLD  (ETF)   ---   1 month

Apple (AAPL) with the 2nd (maybe 3rd) largest market cap added 42 in Sep & reached new record levels, rising with higher market averages. 

Apple  ---   1 month

Jul up, Aug down & Sep up, quite a roller coaster ride. Maybe that suggests Oct will bring another down month.  Dow had a great month, but has topped out around 10.8K in the last 10 days.  Meanwhile, MLPs want to take their average to new records, gold is at new records &; Treasuries are at or near record levels (with correspondingly low yields).  This divergence is tough to decipher, but I'm still looking for the defensive plays to win out short term.  Congress has shut down so they can go home & beg for extensions on their jobs.  Tax rates for next year will not be decided until after elections, 5 weeks away (& probably longer).  The IRS has already said that it will have to revise tax withholding tables based on the old (higher) rates because they need lead time going into Jan.  The implications of higher taxes at the start of the new year will be tough for stock markets to swallow.

Dow Jones Industrials   ---   1 month

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