Dow began the day lower but buyers came in around midday to give it a lift. Dow finished up 34, advancers over decliners 2-1 & NAZ added 4. Bank stocks led the way higher, with the Financial Index rising 2 to 212 (only 1 below last week's interim high).
The MLP index fell a fraction to 397 (14 below its record high last month) while the REIT index rose 1½ to 250 (3 below its yearly high reached last week). Junk bond funds were generally higher & Treasuries rose for a 4th day in their longest winning streak in almost a month as an unexpected drop in US home sales added to skepticism that the pace of the economic recovery will diminish the refuge appeal of US debt. Oil rebounded on increased nervousness over Iran's intentions & gold had its best day in a month. However a gold trader said on Bloomberg that short term, he is looking for it to go lower (while the longer term outlook is for higher prices).
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Ben Bernanke said the slow recovery from the recession & 2008 financial crisis illustrates how vulnerable the global economy is, while urging policymakers to learn from that lesson. He noted the extraordinary steps taken by the Federal Reserve (FED) & other central banks to stabilize financial systems, during a conference on the crisis The FED purchased more than $2T in bonds (an immense amount of money) to push long-term interest rates lower. The effort was aimed at encouraging lending & borrowing. Bernanke defended the actions as a successful effort that guarded against an even more severe downturn. "This outpouring of research will help shape future central bank doctrine and policy approaches and, most importantly, should help central banks better carry out their missions to promote the public welfare," Bernanke said.
Federal Reserve Bank of St. Louis President James Bullard said the US & world economies risk elevated inflation that persists for years should developed nations mistime their exits from easy monetary policies. “Once inflation gets out of control, it takes a long, long time to fix it,” Bullard said. “Ultra-easy” policies across the Group of Seven nations, which include the U.S. and Germany, may be retained for too long. US monetary policy may be at a “turning point” & the FED’s first interest-rate increase since the global financial crisis could come as soon as late 2013, Bullard said. But this view contrasts with a debate among FED policy makers on whether more stimulus is needed even after the US. economy accelerated and unemployment fell. Over the decades, central banks are “known for overstaying their welcome on policies” & the hardest thing for policy makers is picking turning points, he said. “There’s some risk that you lock in this policy for too long a period.” Bullard cited a protracted fight with inflation by Paul Volker, FED chairman from 1979-1987. Food for thought.
Not a lot was decided today. Many traders probably took off early for a long week. Dow fell 152 this week but is up 128 in Mar. YTD it is up a more impressive 862, but clearly has lost steam in the latter part of Q1.
The MLP index fell a fraction to 397 (14 below its record high last month) while the REIT index rose 1½ to 250 (3 below its yearly high reached last week). Junk bond funds were generally higher & Treasuries rose for a 4th day in their longest winning streak in almost a month as an unexpected drop in US home sales added to skepticism that the pace of the economic recovery will diminish the refuge appeal of US debt. Oil rebounded on increased nervousness over Iran's intentions & gold had its best day in a month. However a gold trader said on Bloomberg that short term, he is looking for it to go lower (while the longer term outlook is for higher prices).
JPMorgan Chase Capital XVI (AMJ)
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Treasury yields:
U.S. 3-month | 0.066% | |
U.S. 2-year | 0.352% | |
U.S. 10-year | 2.237% |
| CLK12.NYM | ...Crude Oil May 12 | ...106.88 | ... 1.53 (1.5%) |
Ben Bernanke said the slow recovery from the recession & 2008 financial crisis illustrates how vulnerable the global economy is, while urging policymakers to learn from that lesson. He noted the extraordinary steps taken by the Federal Reserve (FED) & other central banks to stabilize financial systems, during a conference on the crisis The FED purchased more than $2T in bonds (an immense amount of money) to push long-term interest rates lower. The effort was aimed at encouraging lending & borrowing. Bernanke defended the actions as a successful effort that guarded against an even more severe downturn. "This outpouring of research will help shape future central bank doctrine and policy approaches and, most importantly, should help central banks better carry out their missions to promote the public welfare," Bernanke said.
Federal Reserve Bank of St. Louis President James Bullard said the US & world economies risk elevated inflation that persists for years should developed nations mistime their exits from easy monetary policies. “Once inflation gets out of control, it takes a long, long time to fix it,” Bullard said. “Ultra-easy” policies across the Group of Seven nations, which include the U.S. and Germany, may be retained for too long. US monetary policy may be at a “turning point” & the FED’s first interest-rate increase since the global financial crisis could come as soon as late 2013, Bullard said. But this view contrasts with a debate among FED policy makers on whether more stimulus is needed even after the US. economy accelerated and unemployment fell. Over the decades, central banks are “known for overstaying their welcome on policies” & the hardest thing for policy makers is picking turning points, he said. “There’s some risk that you lock in this policy for too long a period.” Bullard cited a protracted fight with inflation by Paul Volker, FED chairman from 1979-1987. Food for thought.
Not a lot was decided today. Many traders probably took off early for a long week. Dow fell 152 this week but is up 128 in Mar. YTD it is up a more impressive 862, but clearly has lost steam in the latter part of Q1.
Dow Industrials
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