Dow shot up 125, advancers ahead of decliners 3-1 & NAZ gained 25. Bank stocks were stronger, taking the Finacial Index up 2 to 204, a 4 month high. The MLP & REIT indices continued in their sideways trading range, flattish again today. Junk bond funds were a little higher as were Treasuries. Oil & gold also rose.
Photo: Yahoo
Big Ben delivered a mostly somber message on growth, but offered no further action to stimulate the moribund economy. He reiterated his position that the FOMC stands at the ready to provide help but is not yet unleashing additional stimulus. But he talked about asset purchases known as quantitative easing. The Federal Reserve (FED) has expanded its balance sheet to $2.8T thru purchases of Treasurys & other debt to boost the stock market & stimulate the economy. The FED also has kept its funds rate target near zero & has indicated that policy is unlikely to change until at least 2014. But his speech was mostly an academic exercise that explained the FED rationale for its actions since the 2008 financial crisis, with just a smattering of its intentions going forward. Bernanke said research shows that FED asset purchases "have significantly lowered" yields for long-term Treasurys, corporate bonds and mortgage-backed securities, while lifting stock prices & helping the economy. "It is probably not a coincidence that the sustained recovery in U.S. equity prices began in March 2009, shortly after the FOMC's decision to greatly expand securities purchases," Bernanke said. "This effect is potentially important because stock values affect both consumption and investment decisions."
Business activity in the US. expanded at a slower pace in Aug, indicating companies may hold the line on production until sales pick up. The Institute for Supply Management-Chicago said today its business barometer fell to 53 this month from 53.7 in Jul. Figures greater than 50 signal expansion. The forecast was the gauge would drop to 53.2. Companies may lack the confidence to invest in new equipment & hire as they face a global economic slowdown & the fiscal cliff threat of more than $600B in gov spending cuts & higher taxes. Manufacturing, which helped spur the recovery, is providing less of a boost for the 3-year-old expansion.
August Business Activity in U.S. Expanded at Slower Pace
The Spanish gov plans to further cut salaries of executives at banks that have received financial aid, Economy Minister Luis de Guindos said. De Guindos announced new banking sector regulation as conditions to receiving up to €100B in euro aid to prop up the country's most troubled banks. He said that for the time being there was no need to ask for accelerated aid for any Spanish banks. Odds are that Spain will still need a bailout.
No announcement about another round of stimulus didn't stop the bulls today. They sense a QE3 coming & are buying before the announcement. Of course many are away on holiday, so it's difficult to make much of this move. The 13K floor held for the Dow, but that has not meant much in the last 6 months when the Dow has not strayed from from that level.
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month | 0.086% | |
U.S. 2-year | 0.242% | |
U.S. 10-year | 1.611% |
| CLV12.NYM | ...Crude Oil Oct 12 | ...96.31 | .... 1.69 | (1.8%) |
| GCU12.CMX | ...Gold Sep 12 | .....1,652.10 | ... 1.40 | (0.1%) |
Get the latest daily market update below:
Photo: Yahoo
Big Ben delivered a mostly somber message on growth, but offered no further action to stimulate the moribund economy. He reiterated his position that the FOMC stands at the ready to provide help but is not yet unleashing additional stimulus. But he talked about asset purchases known as quantitative easing. The Federal Reserve (FED) has expanded its balance sheet to $2.8T thru purchases of Treasurys & other debt to boost the stock market & stimulate the economy. The FED also has kept its funds rate target near zero & has indicated that policy is unlikely to change until at least 2014. But his speech was mostly an academic exercise that explained the FED rationale for its actions since the 2008 financial crisis, with just a smattering of its intentions going forward. Bernanke said research shows that FED asset purchases "have significantly lowered" yields for long-term Treasurys, corporate bonds and mortgage-backed securities, while lifting stock prices & helping the economy. "It is probably not a coincidence that the sustained recovery in U.S. equity prices began in March 2009, shortly after the FOMC's decision to greatly expand securities purchases," Bernanke said. "This effect is potentially important because stock values affect both consumption and investment decisions."
Business activity in the US. expanded at a slower pace in Aug, indicating companies may hold the line on production until sales pick up. The Institute for Supply Management-Chicago said today its business barometer fell to 53 this month from 53.7 in Jul. Figures greater than 50 signal expansion. The forecast was the gauge would drop to 53.2. Companies may lack the confidence to invest in new equipment & hire as they face a global economic slowdown & the fiscal cliff threat of more than $600B in gov spending cuts & higher taxes. Manufacturing, which helped spur the recovery, is providing less of a boost for the 3-year-old expansion.
August Business Activity in U.S. Expanded at Slower Pace
The Spanish gov plans to further cut salaries of executives at banks that have received financial aid, Economy Minister Luis de Guindos said. De Guindos announced new banking sector regulation as conditions to receiving up to €100B in euro aid to prop up the country's most troubled banks. He said that for the time being there was no need to ask for accelerated aid for any Spanish banks. Odds are that Spain will still need a bailout.
No announcement about another round of stimulus didn't stop the bulls today. They sense a QE3 coming & are buying before the announcement. Of course many are away on holiday, so it's difficult to make much of this move. The 13K floor held for the Dow, but that has not meant much in the last 6 months when the Dow has not strayed from from that level.
Dow Jones Industrials
Get your favorite symbols' Trend Analysis TODAY!
No comments:
Post a Comment