Monday stocks in Asia fell 0.5%, in Europe 0.6%, and in the U.S. 0.8% on very low volume. The 10-Year U.S. Treasury Bond yield moved up to 2.88%. Tuesday, in Asia stocks plunged 1.6%, in Europe half that, and in the U.S. half that again on very low volume. The real action though was in the 10-Year U.S. Treasury Bond yield which moved down to 2.81%. The day felt a bit like the Tuesdays of old that predictably ramped stocks higher. Perhaps the Fed ran out of money for pumping up stocks, but by the close, the Dow Jones Industrial Average actually lost ground for the day.
Of course, with Wednesday the day of the FOMC minutes release which could give further insight into the taper schedule, the markets breathlessly awaited the hour. Wednesday in Asia stocks closed down 0.6% as they later did in Europe. Here’s an interesting perspective from FOMC supper-dove Bullard. And from the using rosy statistics to lie department we have this. In the U.S., stocks fell 0.9% on low volume after the market digested the FOMC minutes. This dragged the Dow Jones Industrial Average down over 100 points and well below the 15,000 level. Apparently, there was not enough talk of Kool-Aid to satisfy the greater fools. While stocks seemed to diverge from reality when the announcement was first released, they followed the consistent trend of long bonds and dropped by the close. The 10-Year U.S. Treasury Bond yield rose to 2.86% and the VXO rose 5.5% to close at 15.59. Although gold fell relatively little, precious metals miners dropped about 3%.
Thursday, the decline of Asian stocks continued, this time falling 0.7%. In Europe and the U.S., stocks rose 0.9% on low volume while the 10-Year U.S. Treasury Bond yield climbed up to 2.9% and the VXO dropped 5.6%. Precious metals and their miners gained about 1%. The trading day was marked by a three-hour shutdown of the NASDAQ market.
In Asia Friday stocks moved up sharply, gaining 1.2%. Stocks in Europe and the U.S. rose modestly at 0.4% and 0.5% respectively on low volume while the VXO dropped 5.5% to end the week at 13.91. Despite the modest gain, it was enough to push the Dow Jones Industrial Average back above the 15,000 level. Precious metals and their miners shot up about 2.5%. The real action was again in U.S. Treasury Bonds where the 10-year yield dropped to 2.82%, bringing it along with stocks to about the point it was at the previous week’s close. The week exhibited a lot of drama but little net change.