Friends
Before Dr. Bernanke even began to give his testimony in front of Congress this morning, markets were encouraged by a somewhat unexpected quarter point rate cut on borrowing in China. Actually, by the time Bernanke testified stocks were already losing a little steam, and after a healthy first hour of trading stocks fell back the rest of the day. At the close, the Dow Jones Industrial Average was up 46 points to close at 12,461, after being up over 125 points in early trading. The S&P 500 was flat to finish the day at 1315 after taking a peek at 1330 earlier. Gold was down $41 to trade at $1592 per ounce. Oil rallied to finish the day up $.84 per barrel to trade at $84.18.
Dr. Bernanke’s testimony did little to change the feeling that more QE is possible, but only likely if conditions continue to deteriorate. Along with the Chinese rate move, the Spanish bond auction, which was not great, at least got done this morning. It looks like the next big flash point is next weekend’s Greek elections (if they can keep from killing each other first). The Thursday jobless claims number came in at 377,000 new claims which was just slightly better than expected, but not enough to make a difference.
Today’s action was disappointing, especially after the initial surge from the Chinese rate cut, but not totally unexpected. Volatility might be the only thing we can be assured of at this moment. It was nice to see the S&P above 1325 today, but not being able to hold it was disappointing. We’ll see how we finish the week tomorrow. Again, we need to close above that 1325 level before we can get too excited about anything.
Have a nice evening everyone.
