Week in Review
Monday, Asian stocks traded down 0.5% on light volume with stock markets in China and Hong Kong closed for holidays. Economic reports in Europe continued their very negative tone. Stocks there rallied over 1.5%. While pundits have multiple theories that attempt to explain these movements, my best guess is the jump relates to beginning-of-month and beginning-of-quarter purchases. In the U.S., stocks rose 0.35% on low volume. We know Bernanke has readily admitted his intent to distort (bubble) markets. Here’s a good article that attempts to quantify that distortion. Google (a solid stock) hit an all-time high, while IBM (an ugly stock) shot up to multi-year highs closing above $210—more evidence of a market ready for decline.
Tuesday, stocks in Asia bounced back slightly, rising 0.2% on low volume with China, India, and Hong Kong closed for holidays. Stocks in Europe edged about 0.2% lower. Stocks in the U.S. closed flat on very low volume. Wednesday, Asian stocks resumed their moderate decline, shedding 0.5% with China still closed for the holidays. In Europe, stocks traded flat.
The stock cheerleaders use the misnomer of “money on the sidelines.” Of course, that’s nonsense. Every stock sold by someone is bought by someone else. Here’s a good article that tells it like it is. In the U.S., the major market indices looked a bit higher, but a broader read indicated a flat day for stocks on low volume. Oil made the big news Wednesday, as the price of a barrel of crude plunged over 4% to close near $88 per barrel.
Thursday, stocks in Asia rose 0.5%. Stocks in Europe traded nearly flat. In the U.S., stocks rose nearly 1% for no particular reason on low volume. Crude oil again took center stage as it recovered nearly all of the loss from the previous day, closing up almost 4%. Friday, the big news came from the Lying with Numbers for Dummies Department. As Rick Santelli predicted, the unemployment figure reported by the government Bureau of Labor Statistics said the unemployment rate miraculously dropped from 8.1% to 7.8%. How’s that for fortuitous? Despite all of the hype, U.S. stocks closed flat on low volume. Stocks in Asia rose 0.4%, while those in Europe shot up 1%. Crude oil dropped another 2% while the 10-Year U.S. Treasury Bond yield shot up over 4% to close over 1.73%.