Friends
It was a difficult day for stocks and bonds as basically both had everything lined up against them. The early day market mover was ECB President Mario Draghi and his over promising and under-delivering. Yes, he did ease as expected but only provided a 10 basis point lowering of the deposit rate to a negative .30% (that’s right- rates are negative in much of Europe), but that was less than hoped for, as was the lack of an anticipated increase in euro bond purchases. That set the dollar falling, rates rising and stocks falling. Then, as news that yesterday’s terrorist event, was likely truly a terrorist event, stocks cascaded even lower.
By the close, the Dow Jones Industrial Average was down 251 points to finish the day at 17,477. The S&P 500 was down 29 points to close at 2049. Gold was up $9 to trade at $1062 per ounce, while oil was up $1.17 to trade at $41.11 per barrel WTI. The aforementioned bond market took it on the chin also as rates had a sizable move up.
Janet Yellen’s testimony in front of Congress also kept markets guessing as she and the Fed continue to be non-committal to raising rates at this month’s FOMC meeting. Tomorrow’s jobs report will certainly hold a lot of importance in the decision making process, but don’t underestimate the power of a falling stock market on that process. Another week of trading like we’ve seen the last couple of sessions and the Fed just might get cold feet – again! Let’s see how that jobs report looks tomorrow.
Have a nice evening everyone.
