Stocks shot out of the gate at the start of trading & buying remained strong. Dow is up 140, advancers over decliners almost 6-1 & NAZ is up 35. Bank stocks rose taking the Financial Index up 2 to 290, but hardly an enthusiastic rise.
The MLP index rose 2½ (from its recently depressed levels) to 276 & the REIT index was up 2½ to the 251s. Junk bond funds were higher & Treasury yields traded close to record lows after Spain said it may need to sell bonds to rescue Bankia group, increasing demand for the safest assets. Oil & gold were higher although near their low levels in 2012. The € continues a little above $1.25 (close to its lowest levels this year).
Photo: Bloomberg
Americans' confidence in the economy in May had its biggest drop in 8 months as consumers worriied about slow hiring, a big stock market drop & the global economy. The Conference Board says its Consumer Confidence Index now stands at 64.9, down from a revised 68.7 in Apr & had the biggest drop since Oct 2011. Expectations were for a reading of 70. The current level is below the reading of 71.6 in Feb (the highest level in a year). Consumer confidence is widely watched because consumer spending accounts for 70% of economic activity & it's significantly below the 90 reading that indicates a healthy economy. But the current level is well above 40 last Oct.
Greece poses a threat to intl prosperity as investors raise bets its days using the eurozone are numbered. Global trade & financial ties mean the pain wouldn't be confined to the euro area. Estimates are that a 1 percentage point slump in the euro countries' economy drags down growth elsewhere by 0.7%. Exporting nations from the UK to China would suffer & commodity producer Russia would face falling oil prices. While the US may fare better, even it would feel echoes similar to the financial infection following the bankruptcy of Lehman Brothers. There are worries that other crisis-torn countries, such as Portugal &Spain, would incur higher borrowing costs. In Germany, perceived as a safe haven because of its stronger economy & lower debt, 10-year bund yields could fall to 1%. The European economy is in deep trouble.
Greek Exit Aftershocks Risk Reaching China
Photo: Bloomberg
Home values in 20 US cities fell in the year ended in Mar at the slowest pace in more than a year as lower borrowing costs & an improving job market gave sales a boost. The S&P/Case-Shiller index of property values fell 2.6% after a 3.5% drop in Feb, matching the forecast. The index rose from the prior month on a seasonally adjusted basis. A comeback in the housing market might be under way. Homebuilders are reporting their most-improved spring selling season in 7 years, propelled by record-low mortgage rates, job gains & shrinking inventories. At the same time the market faces challenges as mortgage credit is difficult to obtain & slow wage growth is keeping some would-be buyers on the sidelines. Call this mildly good news.
Home Prices in U.S. Fell at Slower Pace in Year Ended March
This is a mystery rally. Maybe it's a reaction to the oversold markets. Even with today's rally, Dow is still down 600 in May. The European debt mess is not just dragging on, but getting worse. Sagging consumer confidence in the US is a reminder that even if the US economy has a modest recovery, it's not out of the woods. I don't believe this rally has legs.
The MLP index rose 2½ (from its recently depressed levels) to 276 & the REIT index was up 2½ to the 251s. Junk bond funds were higher & Treasury yields traded close to record lows after Spain said it may need to sell bonds to rescue Bankia group, increasing demand for the safest assets. Oil & gold were higher although near their low levels in 2012. The € continues a little above $1.25 (close to its lowest levels this year).
JPMorgan Chase Capital XVI (AMJ)
Treasury yields:
U.S. 3-month | 0.081% | |
U.S. 2-year | 0.285% | |
U.S. 10-year | 1.729% |
| CLN12.NYM | ...Crude Oil Jul 12 | ....91.55 | ..... 0.69 | (0.8%) |
| GCK12.CMX | ...Gold May 12 | ...1,568.80 | ... 11.50 | (0.7%) |
Get the latest daily market update below:
Americans' confidence in the economy in May had its biggest drop in 8 months as consumers worriied about slow hiring, a big stock market drop & the global economy. The Conference Board says its Consumer Confidence Index now stands at 64.9, down from a revised 68.7 in Apr & had the biggest drop since Oct 2011. Expectations were for a reading of 70. The current level is below the reading of 71.6 in Feb (the highest level in a year). Consumer confidence is widely watched because consumer spending accounts for 70% of economic activity & it's significantly below the 90 reading that indicates a healthy economy. But the current level is well above 40 last Oct.
Greece poses a threat to intl prosperity as investors raise bets its days using the eurozone are numbered. Global trade & financial ties mean the pain wouldn't be confined to the euro area. Estimates are that a 1 percentage point slump in the euro countries' economy drags down growth elsewhere by 0.7%. Exporting nations from the UK to China would suffer & commodity producer Russia would face falling oil prices. While the US may fare better, even it would feel echoes similar to the financial infection following the bankruptcy of Lehman Brothers. There are worries that other crisis-torn countries, such as Portugal &Spain, would incur higher borrowing costs. In Germany, perceived as a safe haven because of its stronger economy & lower debt, 10-year bund yields could fall to 1%. The European economy is in deep trouble.
Greek Exit Aftershocks Risk Reaching China
Home values in 20 US cities fell in the year ended in Mar at the slowest pace in more than a year as lower borrowing costs & an improving job market gave sales a boost. The S&P/Case-Shiller index of property values fell 2.6% after a 3.5% drop in Feb, matching the forecast. The index rose from the prior month on a seasonally adjusted basis. A comeback in the housing market might be under way. Homebuilders are reporting their most-improved spring selling season in 7 years, propelled by record-low mortgage rates, job gains & shrinking inventories. At the same time the market faces challenges as mortgage credit is difficult to obtain & slow wage growth is keeping some would-be buyers on the sidelines. Call this mildly good news.
Home Prices in U.S. Fell at Slower Pace in Year Ended March
This is a mystery rally. Maybe it's a reaction to the oversold markets. Even with today's rally, Dow is still down 600 in May. The European debt mess is not just dragging on, but getting worse. Sagging consumer confidence in the US is a reminder that even if the US economy has a modest recovery, it's not out of the woods. I don't believe this rally has legs.
Dow Industrials (INDU)
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