Tuesday, October 5, 2010

Markets rise on Japanese move to weaken yen

Buyers returned after the improved data on non-manufacturing businesses & Japanese efforts to stimulate their economy.  Dow is up 135, advancers ahead of decliners 4-1 & NAZ was up 45.  Bank stocks led the way higher, but the Financial Index is just sloshing around its yearly lows.

The Financial Index
Value 195.62  Change +1.86 (+1.0%)

One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)


The Alerian MLP Index gained another 1 to the 341s.  It needs another 1+ to break thru to a new record lebel, topping the prior record set in Jul 2007.  REITs are strong, taking their index up 2 to the 215s & near its yearly high of 219.  Junk bond funds rose, very close or at yearly highs.  The yield on the 10 year bond inched down to 2.46%, a 5 week low, on expectations of increased buying by the Federal Reserve. 

Treasury yields

U.S. 3-month   0.11%
U.S. 2-year       0.41%
U.S. 10-year     2.46%

Alerian MLP Index  ---  2 weeks




Dow Jones REIT Index  ---  2 weeks




10 Year Treasury Yld Index --- 2 weeks




Rising stock markets bring out buyers for oil.  But gold also shot up, to another record.  Govs (US & Japan) announced they are going to buy more Treasury debt, increasing the supply of money.

CLX10.NYM ...Crude Oil Nov 10 ...82.11  ...0.64 (0.79%)

GCV10.CMX ...Gold Oct 10 ...1,330.00  ...14.60 ...(1.11%)

Gold Super Cycle Link! Click Here


GLD  (ETF)  ---   6 months





The index of non-manufacturing businesses rose to 53.2 in Sep from 51.5 in Aug according to the Institute for Supply Management’s (readings greater than 50 signal growth) & averaged 55.3 during the 6 year expansion that ended in Dec 2007.  The median forecast was for a rise to 52.

Service Industries in U.S. Expanded at Faster Pace
 
Index for non-mfg businesses - 1 year

One-Year Chart for Non ManNMI (NAPMNMI:IND)




While markets have nice gains, the Dow has hardly budged from 10.8K in the last 3 weeks.  Auto sales for Sep should be out today, giving more clues about strength in the recovery.  The MLP index is up 56 (20%) YTD & should be able to go above its record.  But Treasuries & gold are also flying to the heavens, not sure how long this combination will last.  The jobs report on Fri & earnings next week will be major market drivers in Oct.

Dow Jones Industrials --- 2 weeks




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