ECO: There were a number of economic releases today. Since Europe is currently in the spotlight, these did not seem to have much of an effect on the market, and probably won’t be tomorrow’s headlines. Nonetheless, nonfarm productivity, initial jobless claims, continuing jobless claims and factory orders were all a little bit better than expected. The ISM non-manufacturing survey was slightly worse than expected, but still above 50, which is the benchmark for growth or contraction.
Europe: The main news out of Europe today was a surprise 0.25% rate cut by the European Central Bank. Additionally, the debt plan seems to be back on track for now.
MLPs: Every day lately, I hear people talking about MLPs (Master Limited Partnerships). Is this a sign the area has been over-invested in? Or is this just the beginning of something bigger?
Gold: The entry about MLPs above reminded me of Gold. People have been talking about Gold for a long time now. Obviously the inputs on Gold prices are quite different than MLPs, but Gold has continued to power higher. Interestingly, it has continued to trade within the channel I have brought up in the past:
Gold (Three Years)
Volatility: I have been hearing a lot of people talk about the incredibly high volatility that the market is currently experiencing. It has seemed elevated, but not high compared to periods like 2008-09 and 1999-2002. Looking back at rolling five week periods in the market as shown below:
S&P 500 Volatility (Since 1990)
Market Today: The market opened higher this morning and continued up throughout the day. The driving factor behind the market strength today was, not surprisingly, Europe and progress toward a Greek bailout. Biotech is the only sector I follow that showed any weakness today.
Have a good day! Brent
