Wednesday, July 29, 2009

Market Reflections 7/28/2009

HighlightsEconomic data was upstaged Tuesday by a rush of efforts to regulate the financial markets. The Commodity Futures Trading Commission said a prior report, one that did not blame speculators for last year's oil spike, is in error and that it will be looking into limiting positions in the market. Later in the day Senator Schumer said he will push for a bill to limit flash trading in which orders, often at the moment that economic data are released, are executed instantaneously through advanced trading systems.
Headlining the day's economic news was a second month of disappointment for consumer confidence. The Conference Board's report showed a new wave of deterioration in the assessment of the jobs market and on future income, results that point to very slow economic recovery at best. But the news didn't hurt the stock market much which is benefiting from a strong earnings season, underscored in Tuesday's session by very strong results at Amgen which helped the NASDAQ to outperform other indexes with a 0.4 percent gain to just over 1,975.
Treasuries were hurt but only slightly by a surprisingly sloppy 2-year auction, one that raises questions over 5-year and 7-year auctions that are still ahead this week. The yield on the 2-year ended at 1.08 percent, right at the high yield on the auction and vs. 1.04 percent at yesterday's close. The dollar index firmed 0.3 percent to 78.88 which pushed down commodities including oil that ended just above $67. Oil traders say the CFTC news is making customers reluctant to take on large positions in the risk that limits will be imposed. Gold ended about $15 lower at $940

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