Memorial Day, stocks in Asia fell 0.9% as the Nikkei 225 index dropped 3.2%. In Europe, stocks rose 0.3%. Tuesday, stocks rose in Asia 0.5% and in Europe 1.3%. In the U.S. stocks rose 0.6% on low volume. The 10-Year U.S. Treasury Bond rate has moved up 32% so far this month and sharply in the past few days as bond investors take the “taper talk” more seriously than do stock investors. Wednesday, stocks dropped 0.3% in Asia, 1.8% in Europe, and 0.8% in the U.S. on low volume. Miners caught fire with gains in the 4% range while AEM gained 7.5% as traders reached for one-quarter of its 3.3% dividend.
Fireworks again ignited in Asia Thursday with the Nikkei 225 index down 5.2% and dragging all Asian stocks to close down 1.4%. Despite that, stocks in Europe closed up slightly. Speaking of fire, precious metals ramped up 2.3% and miners surged about twice that. U.S. stocks rose 0.4% on low volume. Friday, stocks in Asia fell just slightly. In Europe they dropped 0.9% and in the U.S. 1.7% on moderate volume. Precious metals fell to lose half of Thursday’s gains. The VXO rose 12% to close at 15.82. For the week, stocks lost a little more than 1%, but for the month they ground out another 2% gain.
The seemingly invincible U.S Treasury Bond rate strangle hold came a bit loose this month as the ten-year rate moved from 1.63% to close at 2.16% — a 33% rise. That takes its toll on valuations for those daring (or shall I say foolish) enough to buy treasuries at such depressed rates. Here’s an interesting article hot off the presses that could shed some light on recent weakness and future prospects.