The trading week was filled with precipitous ups and downs. Traders could not hide from the volatility which was felt in all industries and market sectors. Art Cashin put it best, “the last two weeks have been like a roller coaster ride, with drastic ups and downs, and when its over you get off where you started and it costs you money.” The week was highlighted by the Bear Sterns deal, the action taken by the Federal Reserve, deleveraging of hedge funds, strengthening of the financial sector, and a broad selloff in commodities.
To put things into perspective lets talk numbers. The Dow Jones Industrial Average was all over; Tuesday +420, Wednesday -300, and today +262 points to gain 3.4% on the week. Moreover, the S&P and the NASDAQ both closed the week positive up 3.21% and 2.06% respectively. The 3-month treasury closed at the lowest levels in FIFTY YEARS, 0.51 percent. The 10-year 3.337%. April Crude oil was down 6.3% on the week to close at 101.84. Heating Oil for April delivery fell by almost 4 cents to $2.9772, and closed the week down 5.38%. Natural Gas closed up 2.8 cents to $9.14, on news that underground supplies were down 85 billion cubic feet, down 14% from a year ago, according to the Department of energy. However, netted an 8.4% loss for the week. July soybeans were down their 50-cent daily limit at $12.22, the lowest close in eight weeks, blamed on heavy selling by funds. Cocoas front month contract closed the week down 24%. Gold hit an intra day high of $1033 mark before ending the week at 920, a fall of 7.5%. Due to the recent drop in corn prices, May feeder cattle closed up .40 cents at $1.0735.
Some traders believe we had reached a bottoming out point and its “off to the races” from here. They are correct to an extent. The Feds determination to fix and keep liquidity in the financial market leads me to believe it is on the mend. Moreover, if you look at individual stocks there are; strong balance sheets, good corporate earnings, and VERY attractive earnings. For example, today we saw a further strengthening in the dollar versus other currencies in-part due to new money coming into the market because of many traders’ bullish outlook. All the major averages closed higher for the week signaling a strong follow through. However, the credit crisis remains. And “we don’t know what we don’t know”, meaning who is exposed to what assets. Only time and the tape will tell…
look for "where to put your money "this weekend...
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment