Friday, April 24, 2009

Weekly Market Update (4/24/09)‏


The US Treasury is expected to release the criteria for its upcoming bank stress tests later today. more...

US Treasuries continue to trade without any specific direction and within a very narrow yield range. more...

Large-Cap Equities
The stock market ended modestly lower in this relatively quiet week. The equity market fell for the first time in almost 2 months on concerns that government stress tests on 19 banks will signal additional losses. more...

Corporate Bonds
Investment grade primary activity continued to stay on the sidelines as earnings remained the center of attention. more...

Mortgage-Backed Securities
The government-agency mortgage market traded in a very tight range over the past week. more...

Municipal Bonds
Build American Bonds (BABs) dominated headlines and market action this week. The State of California sold nearly $7 billion in taxable municipal bonds, $5 billion of which were issued under the BABs program. more...

Along with the equity market, high yield started the week lower but came charging back. more...

Western European Equities
Stocks in Western Europe gained ground over the past week. The stocks with the best performance were oil and gas (+5.4%) and retail (+5.4%). more...

Eastern European Equities
The CECE index of equities traded in Central Europe (Czech Republic, Hungary, and Poland) gained +1.4% this week, while the Russian stock index RTS lost -0.4%. more...

Global Bonds and Currencies
Major non-US sovereign bond markets spent a relatively quiet week, in most cases ending slightly firmer but well within their recent ranges. more...

Emerging-Market Bonds
Emerging market dollar-pay debt spreads were largely unchanged this week, following the tone in US equities. more...

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Have a great weekend!

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Market Reflections 4/23/2009

Markets showed little reaction to talk that Chrysler is preparing for bankruptcy and news that GM is closing down output for two months. But the headlines don't improve the economic outlook any. Neither do existing home sales which continue to scrape along the bottom. Weekly jobless data show a 12th straight rise in continuing claims. The S&P 500 ended 1.0 percent higher at 851.92. The day's run of earnings produced no surprises.

Strong economic data out of Europe did raise optimism there, pushing down the dollar which fell 1-1/2 cents to $1.3150 against the euro. Oil held just under $50 with gold edging over $900. Money moved into the Treasury market across the curve with the 3-month bill ending at a very tight yield of 9 basis points.

Thursday, April 23, 2009

Market Reflections 4/22/2009

Banking news may be taking a turn for the worse. Morgan Stanley posted an unexpectedly deep loss and cut its dividend, news that follows last week's warning from Bank of America that qualified borrowers are scarce. Morgan Stanley shares lost 9.0 percent while the S&P 500 slipped 0.8 percent. The dollar eased slightly to end at $1.3005 against the euro while the Treasury curve steepened ahead of long-end supply. Huge builds in weekly inventories didn't hurt oil which firmed to $48. Gold firmed slightly to $890.

Tuesday, April 21, 2009

Market Reflections 4/21/2009

Reassurance from Treasury Secretary Geithner that the vast majority of banks are well capitalized helped to ease questions over stress tests and sparked a rally in the stock market where the S&P 500 gained 2.1 percent to end at 850.08. Earnings news was mostly upbeat including an optimistic outlook from industrial conglomerate United Technologies. Kansas City Federal Reserve President Thomas Hoenig offered lively testimony, saying the too-big-to-fail doctrine is uncompetitive and is at the center of the financial crisis. The dollar held firm at $1.2950 against the euro while Treasury yields were mixed. Oil firmed to just over $47 while gold held steady at $884.

Market Reflections 4/20/2009

News from Bank of America that it is having trouble finding qualified borrowers is a new twist for the markets which had been focused on whether banks were bankrupt or not. The change to mark-to-model accounting is giving a boost to bank profits including profits at Bank of America. Not doing as well are the bank's customers who are being pulled under by the wave of layoffs.

Investors ran back into safety Monday in a big move that raises the question whether five weeks of stock-market gains were grounded in fundamentals. The S&P 500 ended at their lows, down 4.3 percent at 832.39. Investors also ran to the dollar, which jumped 1 cent against the euro to $1.2924. Treasuries were in high demand with the yield on the 10-year falling 11 basis points to 2.83 percent. The yield on the 3-month bill tightened a notch to a thinning 12 basis points.

Investors fled commodities which had been benefiting from expectations for economic improvement together with inflation. Oil touched $44 for the first time in five weeks, ending down 4-1/2 dollars to $45.60. Grains and industrial metals, two groups that had been very strong, were down across the board. Gold of course was one commodity that didn't suffer. Gold, which just last week seemed to be finally wavering, gained $15 to end at $885.