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Monday, November 2, 2009

Morning Market Report

If you ever wanted to be a day trader, try and figure out the last two days in the market. On Thursday, the GDP came out. They were strong and better than expected, at 3.5% growth. The markets grew. The Dow was up just under 200 points. The next day the consumer spending and income numbers came out. They both disappointed. All indices lost all their Thursday gains and then some. GDP is a much broader number. It encompasses a lot more economic data. Yet, the much narrower economic figures won out and affected the markets significantly more. In any case, the Dow, which was pushing 10000 on Thursday, is testing 9700 today.

Meanwhile, CIT has filed for bankruptcy. I've mentioned this firm since the summer. They initially wanted a government bailout. Then, their creditors gave them a temporary reprieve. Then, the company played footsy with billionaire financier Carl Icahn. Now, they've officially filed for bankruptcy protection with about a billion of his dollars. While the average person isn't likely to have heard of CIT, this is one of the nation's biggest small business lenders. We all know how difficult it's been for small businesses to get financing and that process only gets more difficult with this. In the summer Taylor Bean and Whitaker went under. TB&W was relatively unheard of but they were the nation's number three lender in FHA. You can bet that the mortgage market felt their hit and this will be no different in small business loans.

Meanwhile, on a more positive note, Ford has had not merely surprising but shockingly good earnings in the last quarter. The company made a billion dollars in the third quarter. That's helped push Dow futures higher though only a moderate half a percent gain. Bonds are looking at slight weakness this morning. The ten year U.S. Treasury bond is now at 3.40% after getting as low as 3.38% on Friday. The yield spread between the two and ten year is now at 2.50%. That's the highest in months. Bonds in London were slightly better this morning while in Germany they were all slightly worse. Meanwhile, oil is slightly higher to $77.78 but that's way down from their highs over $80 a barrel last week.

Here's the rundown of the markets in Europe and the Far East. The Hang Seng in China was down .61%, the NIKKEI in Japan was down 2.31%, and the Straits Time Index in Singapore was down .21%. Also, the broader Chinese index was up 2.7%, so it wasn't all bad in the Far East. In Europe, the FTSE in London was up .54%, the DAX in Germany was up .02%, and the Spanish index was down .14%.

In currencies, the dollar is down by .37% against the Euro, up .52% against the British Pound, and down .07% against the Japanese Yen.

1 comment:

Anonymous said...

Stepped up market volatility implies a reversal.