Market Soapbox 08/10/05
Resistance: DJIA 10750; SP500 1250; Nasdaq 2200; NDX 1625
Support: DJIA 10500 ; SP500 1210 ; Nasdaq 2100; NDX 1535
European markets & Asian markets up. Dollar down vs. Yen/Euro , oil, commodities & gold up, bonds flat.
Today's Soohey Pig Award goes to me for letting the pig have a quiet day in its poke.
The Dax Index finished up 1.5%, eclipsing yesterday's best one-day advance (+1.3%) since June 1, while the FTSE 100 and CAC 40 Index both closed at new 52-week highs.
Before the bell, the Nikkei 225 closed up 1.7%, the best level seen in 16 months, while the Hang Seng Index surged 2.0%, closing at new 4-year highs.
Bonds initially rallied following six straight weeks of declines, which sent benchmark yields on the 10-year note below 4.40%, then retreated.
Confirmation that Fannie Mae will miss the deadline for filing its Q2 report with the SEC and disappointing Q1 (Oct) sales guidance from Cisco Systems had little effect on the market.
The market applauded the FOMC statement which indicated decent economic conditions and gave a 25 basis point increase; and ignored allowance for more measured rate increases with no pause in sight.
Yesterday's gap up turned into a rally +85 DJIA with a large first hour surge that lauched it into a sea of green, then a reversal for a down day on higher volume. By the end of the day, gold and energy were in the green.
Oil set a new record high of $64.20/bbl just before noon; and at 1PM the 5yr note auction started. Ultimately, oil went above $65/bbl as we said it would long ago,
Where will oil go? T. Boone Pickens, the Texas oilman, told CNBC's Melissa Francis that crude will reach $75 a barrel before long.
Adjusted for inflation, to equal the 1981 high would require oil to go above $90/bbl. U.S. gasoline futures struck a record Wednesday of $1.8990 a gallon.
A mixed $13 bln 5 year note auction that awarded investors 4.223% - the first time the Treasury Dept. has paid a coupon of more than 4% on five-year debt since May 2002.
While direct bidders (small buyers) saw a surprising 2.8%, indirect bidder participation (foreign central banks) checked in at 21.8%, well below an overall average of 38.7%.
Todays, 5 year note auction and options unwind seemed to have an effect on the market, but not as much as $65 oil.
Thursday's 10 year note auction might be a blip on the radar, but $65 oil will not be. Perhaps the unwind started last Wen. and lasted until Monday?
The good news, at around 2:30EST the July Treasury budget deficit checked in at $52.8 bln, less than economists' forecasts of -$67.5 bln. If we keep this up, we could be $150bln less on the debt. Oh boy!
We take it day by day and keep our eyes peeled to the sky, because it could be a name brand that pancakes us. Just my opinion, I could be wrong.
Support: DJIA 10500 ; SP500 1210 ; Nasdaq 2100; NDX 1535
European markets & Asian markets up. Dollar down vs. Yen/Euro , oil, commodities & gold up, bonds flat.
Today's Soohey Pig Award goes to me for letting the pig have a quiet day in its poke.
The Dax Index finished up 1.5%, eclipsing yesterday's best one-day advance (+1.3%) since June 1, while the FTSE 100 and CAC 40 Index both closed at new 52-week highs.
Before the bell, the Nikkei 225 closed up 1.7%, the best level seen in 16 months, while the Hang Seng Index surged 2.0%, closing at new 4-year highs.
Bonds initially rallied following six straight weeks of declines, which sent benchmark yields on the 10-year note below 4.40%, then retreated.
Confirmation that Fannie Mae will miss the deadline for filing its Q2 report with the SEC and disappointing Q1 (Oct) sales guidance from Cisco Systems had little effect on the market.
The market applauded the FOMC statement which indicated decent economic conditions and gave a 25 basis point increase; and ignored allowance for more measured rate increases with no pause in sight.
Yesterday's gap up turned into a rally +85 DJIA with a large first hour surge that lauched it into a sea of green, then a reversal for a down day on higher volume. By the end of the day, gold and energy were in the green.
Oil set a new record high of $64.20/bbl just before noon; and at 1PM the 5yr note auction started. Ultimately, oil went above $65/bbl as we said it would long ago,
Where will oil go? T. Boone Pickens, the Texas oilman, told CNBC's Melissa Francis that crude will reach $75 a barrel before long.
Adjusted for inflation, to equal the 1981 high would require oil to go above $90/bbl. U.S. gasoline futures struck a record Wednesday of $1.8990 a gallon.
A mixed $13 bln 5 year note auction that awarded investors 4.223% - the first time the Treasury Dept. has paid a coupon of more than 4% on five-year debt since May 2002.
While direct bidders (small buyers) saw a surprising 2.8%, indirect bidder participation (foreign central banks) checked in at 21.8%, well below an overall average of 38.7%.
Todays, 5 year note auction and options unwind seemed to have an effect on the market, but not as much as $65 oil.
Thursday's 10 year note auction might be a blip on the radar, but $65 oil will not be. Perhaps the unwind started last Wen. and lasted until Monday?
The good news, at around 2:30EST the July Treasury budget deficit checked in at $52.8 bln, less than economists' forecasts of -$67.5 bln. If we keep this up, we could be $150bln less on the debt. Oh boy!
We take it day by day and keep our eyes peeled to the sky, because it could be a name brand that pancakes us. Just my opinion, I could be wrong.
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