Friends
Well, we were having a nice boring day when at about 2:00 pm the rating agency, Fitch, reported that U. S. banks could be downgraded if the European situation is not soon resolved favorably. Stocks which after an early decline had rallied to positive territory then fell immediately and the Dow Jones Industrial Average finished the day down 190 points. The S&P 500 was down 20 points to close at 1236. Gold was down $18 for the day to finish near $1763. A bigger story was oil, which cut through the $100 level with ease and finished up almost $2 to close near $102 per barrel WTI. Yikes! Today is another example of-you never know what you might step in as you stroll peacefully through the stock market maze on a daily basis. As a revered money manager once said, “that ain’t mud on your boots partner”.
On the domestic economic front, we have gotten benign PPI and CPI numbers the last two days, indicating that inflation is under control ( a positive), and the Industrial Production number we got today was well ahead of consensus and much better that last month’s number (another positive). The NAHB homebuilder sentiment rose to its highest reading in 15 months (again positive). But again, none of this matters, we only care about Italian and now Spanish bonds and European politics. No complaining, as I always say, we trade the market we have, not the one we want.
On a technical front, we now are well below our 1257 to 1260 area on the S&P and once again it becomes short term resistance. The Dow finds itself below 12,000 once again, also. It also does not help that oil is climbing higher, seemingly every day lately. Today is just another example of how easily this market is pushed around these days. Light volume and a lack of participants. It is frustrating when our domestic situation seems to be getting slightly better. Oh well, a good time to look for some bargains.
We’ll check in with you tomorrow. Have a nice evening everyone.
