Friends
Stocks got off to a good start this morning getting back about 150 early Dow Points from yesterday’s shellacking, fueled by a “successful” auction of 12 month Italian notes and an unemployment claims number of 390,000 which was under the 400,000 number once again this week. The 10 year Italian note traded back under 7% buoyed by the successful note auction (if you can call a yield of over 6% vs. 3.5% a month ago a success). That gave traders a brief sigh of relief, at least for a day.
The Dow Jones Industrial average finished the day up 113 points to close a 11,894. The S&P 500 was up 10 points to close at 1239. Gold bucked the “risk on” positive trend by falling $30 to the $1761 level late in the day. Oil resumed its climb, up nearly $2 for the day to close near the $98 per barrel WTI level. Oil’s rise from less than $80 just weeks ago to near $100 is somewhat disturbing and should start to provide a headwind for economic activity. The domestic bond auctions did not go particularly well this week as dealers seemed to not want to be stuck with a lot of inventory, especially 30 year bonds just above 3%. Remember our discussion of rates yesterday. We want rates to go up for good reasons, not bad ones (like lack of demand).
We did repair a little of the damage that was done yesterday, but it would be nice to see some follow through tomorrow and perhaps see the S&P climb to the 1260 area that has been both resistance and support recently. A close back above 12,000 on the Dow would also be constructive.
We’ll see what tomorrow brings. Have a nice evening everyone.
