Wednesday, September 8, 2010

Markets are higher after Portugal's debt auction

Stocks rose following strong demand for new debt sold by Portugal. But volume continues very light. Dow is up 80, advancers ahead of decliners 4-1 & NAZ gained 22. Banks stocks are doing well but the Financial Index is still in the low end of its trading range over the last year.


Value 193.48 One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change 2.92 (1.5%)

The Alerian MLP Index was up a fraction, almost reaching 327, while the REIT index gained 1½ to the 212s. Both are near their 2010 highs. Junk bond funds were higher, at or near their yearly highs. The VIX fell a fraction in the 23s near its lows for the last 4 months. The € was up ½ a penny to $1.27½. Stocks rallied so Treasuries sold off. The yield on the 10 year Treasury bond rose 5 basis points to 2.66%.

Treasury Securites

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

Alerian MLP Index --- 2 weeks

Dow Jones REIT Index --- 2 weeks

VIX --- 2 weeks

10-Year Treasury Yld Index --- 2 weeks

Oil is higher following higher stocks & gold is trying so hard to set another record.

CLV10.NYM...Crude Oil Oct 10...74.65 ...Up 0.56

GCU10.CMX...Gold Sep 10...1,260.20...Up 2.90

Gold Super Cycle Link! Click Here

Gold is trading near a record as investors sought an alternative to equities & protection of wealth on concern the economic recovery is stalling. In these time of greater uncertainty, the safe haven qualities of gold bring out buyers. A new record would mean gold bulls will be calling for $1300. Bullion has jumped 15% this year & is set for a 10th annual gain. Futures reached a record $1,266 back in Jun. Gold has gained this year as inflation has slowed. A link button above is provided to learn more about gold as an investment.


This was the busiest day for selling US corp bonds in more than 7 months as investment-grade borrowing costs hover near the lowest on record. Companies sold $15.4B as yields fell to 3.83%. In Europe, banks & corp are marketing over 4.6B € ($5.9B) of bonds to refinance debt. Home Depot (HD), a Dow stock, sold $1B due in 10 & 30 years in its first offering in almost 4 years. Dell (DELL) raised $1.5B & Burlington Northern sold $750M of debt. Investment-grade bond sales soared following signs last week the economy won’t slip back into a recession. Debt sales may set a record for the week & month.

Home Depot, Dell Drive Issuance to Highest in Seven Months: Credit Markets

When volume is low, it doesn't take much to move markets. NYSE volume is only 0.2B shares, very low. The news about Portugal attracting lenders was the prime force today. But domestic issues are growing in importance. The Dems are talking about tax cuts & increased spending to fix the economy, that's a muddled mess. The "Recovery Summer" has been discarded & replaced with thoughts about another stimulus package. With over $50B in "shovel ready projects" from the original stimulus package still waiting for the shovels to begin work, more spending, which will add to the deficit, is not getting a good reception. Dow remains in the middle of its 10 month trading range, going nowhere.

Dow Jones Industrials --- 2 weeks

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