July Fireworks

Monday, stocks in Asia fell 0.4%. They rose 1% in Europe and 0.6% in the U.S. on low volume. Precious metals rose 1% while their miners gained more than twice that. The VXO fell over 7% to close at 16.01. Tuesday, stocks in Asia closed up 1%, in Europe down 0.5%, and in the U.S. down 0.4% on low volume. Precious metals miners slid more than 4%. Crude oil rose to about $100 per barrel as news regarding escalating Mediterranean turmoil intensified. Wednesday, despite President Obama’s gift to large companies to delay some Obamacare provisions (does he have that authority???), Asia was down 1.5%, Europe slipped 0.7%, and the U.S. closed off just slightly on very low volume.

Thursday in Asia, stocks rose 0.5%. The ECB and BoE both jawboned a dovish sentiment, sending stocks soaring 2.4% higher in Europe. Stock markets in the U.S. were closed for Independence Day. The durability of such euphoria in Europe especially with Greece and Portugal crumbling, should be very short lived.

Friday in Asia, stocks gained 1.3%. In Europe, stocks gave back that same amount — more than half of the previous day’s bogus gains. In the U.S. the party continued, with stocks gaining 0.9% on very low volume and the VXO sinking nearly 10% to close at 14.62. The Dow Jones Industrial Average shot above the 15,000 level again supposedly based on a “strong” employment report. If you own long bonds, though things may not be so happy for you. In the spirit of the season, the 10-Year U.S. Treasury Bond rate skyrocketed upward 8.6% to close above 2.7%. Precious metals lost 3% for the day and their miners lost nearly twice that.

For the week, stocks plowed ahead 1.6% and crude oil shot up over 7%. With earnings season upon us, a strong dollar, rising interest rates, and pricey valuations, could this be stocks last hurrah? As we witness the Fed apparently losing their iron grip on long rates, perhaps they will be more willing to play the stocks card and pummel the stock market to prop up bonds.

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