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Wednesday, October 7, 2009

Morning Market Report

A report from the British newspaper the Independent drove all the business activity yesterday. That story said that many of the oil producing nations were meeting, in secret, to discuss a potential alternative to the Dollar to buy and sell oil in the world markets. That news sent the Dollar stumbling but also sent equities soaring. The Dow, NASDAQ and S&P were all up at least 1.25% yesterday. The conventional wisdom was that the market reacted favorably because a weaker dollar would help multinationals. Also, gold set all time highs after the news.

Markets this morning are relatively quiet. The Dow, NASDAQ, and S&P 500 futures are mixed but each is up or down less than a quarter of a percent, though that is fluid. Meanwhile, the surge in equities and weakness in the Dollar haven't had that much of an effect on bonds, yet at least. The ten year U.S. Treasury is trading at 3.21%, the same place it was yesterday morning. That's about 7 basis points up from its near six month low set last week but still very strong. The yield spread between the two and ten year also continues to tighten and is currently at 2.32%. Meanwhile, oil has reached above $70 a barrel following the news. It's currently trading even from yesterday but up since last week and currently at $70.89.

Meanwhile, the Dollar is getting back some after its bloody day yesterday. It's up by .39% against the Euro, up by .16% against the British Pound, and up by .44% against the Japanese Yen.

The markets in the world are again a near mirror image. It was up near across the board in the Far East and down across the board in Europe.

The Hang Seng was up 2.11%, the NIKKEI in Japan was up 1.11%, and the Straits Time Index in Singapore was up .87%. In Europe the FTSE in London was down .37%, the DAX in Germany was down .19%, and the Spanish index was down .33%.

Finally, mortgage applications were up last week and that's not surprising since the thirty year fixed rate reached below 5% for the first time in months.

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