Friday, November 25, 2011

Oversold markets rebound

In pre trading, markets were trading lower.  But stocks started strong, putting in a good performance.  This was to be expected from over sold conditions & slow trading on no major news.  Dow rose 81, advancers ahead of decliners 3-1 & NAZ was up a more modest 8.  Bank stocks continue to lead the markets.

S&P 500 Financials Sector Index

Value 160.17 One-Year Chart for S&P 500 Financials Sector Index GICS Level 1 (S5FINL:IND)
Change     2.73    (1.7%)

The Alerian MLP Index rose 1 to 361 while the REIT index was up 3 to 210.  Junk bond funds were higher (along with stocks) while Treasuries sold off after the recent rally.  Oil rose, following gains in stocks on speculation that euro-area leaders will do more to fight the debt crisis.  Gold is having a tough time finding friends, falling further below 1700.

AMZ   Alerian MLP Index

DJR  Dow Jones Equity REIT Index

Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLF12.NYM....Crude Oil Jan 12...97.24 ...Up 1.07  (1.1%)

GCX11.CMX...Gold Nov 11....1,688.90 ...Down 6.80  (0.4%)

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Hungrary will redouble efforts to obtain IMFaid & the central bank should raise rates to ease financing risks after Moody’s cut the country’s credit grade to junk.  The foreign local-currency bond ratings were cut one step to Ba1 from Baa3, Moody'said yesterday & was assigned a negative outlook.  Prime Minister Orban, who had shunned seeking an IMF loan since coming to power last year until the currency fell to a record against the € this month, may need to accelerate talks with the IMF to bolster confidence.  The gov is seeking “insurance” from the IMF & the European Union that doesn’t entail a loan & doesn’t impose conditions on the economic policy.  Orban wants to retain a “free hand” in economic policy, which included forcing banks to swallow exchange-rate losses on foreign-currency mortgages & levying extraordinary industry taxes.  The central bank will probably raise the benchmark 2-week rate to 6.5% next week from 6% after holding the 2-week deposit rate unchanged since Jan.  The yield on the benchmark 5-year bond yield rose 89 basis points to 9.78%, rising the most in 2½ years.  Hungary’s foreign-currency debt maturing next year will soar to $5.8B, a 48% increase from this year.   Add another country to the troubled list in Europe.

<p>Customers shop at Macy's department store in New York November 25, 2011. REUTERS/Eric Thayer</p>

Photo:   Yahoo

Eager shoppers hunted for bargains on big-screen televisions, video games & toys while fretting about their shaky economic well-being, looking for bargains on Black Fri.  Some stores pushed their openings & specials up to Thanksgiving night, hoping to get a jump-start on the busiest day of their year. While Black Fri has been the busiest day for years in terms of traffic at stores, it does not always mean that sales will soar for the season.  Despite brisk sales right after Thanksgiving, total holiday season sales fell in both 2008 & 2009 when the recession took its hold on wallets.  The National Retail Federation expects 152M to hit stores this weekend, up 10.1% from last year, but it only expects sales for the full Nov-Dec holiday season to rise 2.8%, after climbing 5.2% in 2010.  Another sign that this is not a robust economic recovery.

Crowds hit stores for "Black Friday" deals

Emerging-market stocks fell to a 7-week low after Moody’s downgraded Hungary’s debt to junk status & a EU official said the European debt crisis is spreading to core countries.  European debts are getting even messier & the US economy is stumbling along, not a good background for a rising market.  Even after today's rebound, Dow is down 460 this week, its worst Thanksgiving holiday week in decades..
Dow Jones Industrial Average

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