Economic Journal - Tuesday, 6/12/2012

(As of 7:59 am pacific)

It’s a quiet day on the markets.  Spain and Italy bond yields are worrying to investors.  Oil is up slightly.  Interest rates are still having an effect from Operation Twist, which ends in two weeks.  Gold is up slightly.  Commodities are generally down.  There doesn’t seem to be a pattern to the market.  It is just meandering, trying to find a course today.  There is not a lot of news today, so I don’t expect  much excitement.

Economic Journal - Monday, 6/11/2012

(As of 8:44 am pacific)

The National news media is once again out of touch with the real news as this weekend there were broad coverage of the Spanish Bank bailout and the negative implications of that. I looked at the markets futures and they were all up significantly as the global financial system was cheering the move. I expected the markets to be up big this morning and they were…for a short while anyway! Other reports from Europe including Greece and Italy rumors brought the market back to earth, and I expect a day of ups and downs and eventually a moderately up day as the markets eventually determine that the Spanish bank bailout trumps other Euro rumors and news. Oil is essentially flat, while gold is down moderately. The dollar is generally down. Volatility has come down from its highs to near level. Economic reports are very light today.

Economic Journal - Friday, 6/8/2012

(As of 11:23 am pacific)

More doubts about Europe and concern about the Chinese decision to lower to Bank Funds rate yesterday are making for a negative market.  There are no economic reports at this time.  Oil and Gold are down significantly.  The markets losses are mild.  The dollar is up against most currencies except the yen.  Volatility is down slightly.   It doesn’t appear to be a ‘risk off’ scenario, where hedge funds are deleveraging and selling everything.  It seems more like profit taking from this week’s huge rally, with some timid bulls continuing to buy.

Economic Journal - Thursday, 6/7/2012

(As of 9:03 am pacific)

China lowered interest rates by a quarter point, sparking a rally based on an expectation of loosened monetary policy to spur growth.  Bernanke is speaking in the US and so far his commentary has restrained markets.  The talk is that things are not that bad, growth is still moderate and there is little reason for further easing, but that they stand ready if needed.  The market is up moderately.  Oil is up and interest rates are up a small amount.  The dollar is down against all but Japan.

Economic Journal - Wednesday, 6/6/2012

(As of 7:58 am pacific)

It’s a risk on scenario as all asset categories are up.  ECB Banker Draghi indicated unlimited funds to banks are available for a period of time.  Thus liquidity is to be more plentiful and more leveraging is taking place.  Oil, gold and commodities are up significantly.  The dollar is generally down against all except the yen.  Interest rates are stable.  Productivity was down slightly, which is a negative going into the summer and another indication that the US economy is braking.

Economic Journal - Tuesday, 6/5/2012

(As of 8:34 am pacific)

 

 

It is a mild day on the markets.  Ignoring Europe and focusing on potential positive action by the G-7 nations, the market is rallying a small amount.  Oil is up slightly as is gold.  Interest rates are stable.  The ISM services index was better than expected, in expansion territory.  This is important because services represent 75% of US GDP.  Spain indicates it is having problems finding financing in world markets.  I think that the market is searching for any little bit of good news to stop this extreme downtrend we have seen over the last few weeks. 

Economic Journal - Monday, 6/4/2012

(As of 7:31 am pacific)

Today’s market action relates to trying to find stability after the crushing negative performance of Friday’s market.  Market open seemed to indicate minor conviction, but soon all indexes turned slightly negative.  Gold and oil were down slightly as well.  Interest rates continue to drop.  Volatility is stable, but slightly higher.  We think that the Federal Reserve Bank might come out with another round of economic stimulus shortly.  It is only a matter of time until the dramatic drop in the price of oil shows up at the gas pump, giving consumers a much needed break.  The oil drop should function similar to a tax cut and result in economic stimulation over the next few months.  Between historically low mortgage interest rates, a significant drop in gas prices, and a possible QE3 or 4 program (depending on how you classify ‘Operation Twist’) we don’t see this market swoon lasting for more than a few weeks.