If the market had closed at 3:30, we would have said HUGE WIN FOR THE BULLS. In the end, it was a split decision because although markets ended lower, it could have been much worse.The scoreboard:
S&P 500: -4.80
And now, the top stories:
- China and Hong Kong slipped again last night, but all the headlines that anyone seems to care about right now are coming out of Europe. There is a run on all of Europe: Spain, Portugal, Italy, Belgium, and possibly even Austria, and it’s not obvious that the European authorities have the tools to deal with the problem. Yields and spreads were blowing out all over the place.
- As for the US pre-market, it felt as though things were ugly, and then New York got out of bed, and saw that everything was coming apart abroad, and then things got really ugly. In addition to a big equity side selloff, all kinds of weird things were happening on the macro front. Gold exploded higher, which was not in keeping with recent moves whereby gold moves in the same direction as equities.
- Also weird? The dollar, which looked strong thanks to euro weakness, got drubbed against the yen. So frighteningly, perhaps, the “risk off” day was not really carrying over into dollar strength. Weirdness all around.
- At 9:00 AM, Case Shiller came out and it was predictably weak. Actually it was worse than predictions, as the evidence continues to pile up that housing is double dipping. However, just later that hour the US economy got two pieces of good news, courtesy of the Chicago PMI and Consumer Confidence.
- After that good data, the market regained its footing. And silver, which had been lagging gold earlier in the day, caught a ferocious bid (also interesting on the commodities front was strength in copper, platinum, and palladium despite the weakness in Asia, which is a break of trend).
- Things were going much better, but than word of a possible downgrade of Portugal hit, and for some reason the market reacted to that, even though that’s hopelessly old news, and we ended where we did.
- One huge loser today: Bank of America, which seems likely to be the target of the next batch of Wikileaks. See here for more >
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