Monday, stocks fell in Asia 1%, rose in Europe 0.4%, and fell in the U.S. 0.4% on moderate volume. The VXO moved up 5% to close at 16.60 and precious metals miners gained 2%. Tuesday, stocks shot up 1.8% in Asia, fell 0.4% in Europe, and gained 1.1% in the U.S. on light volume. This was enough to drag the S&P 500 index above the 2100 level and IBM above 140. The VXO dropped 11% to end the day at 14.84 and precious metals miners gained 3%.
Wednesday, stocks rose slightly in Asia, changed little in Europe, and dropped 1.2% in the U.S. on light volume. This pulled the S&P back below 2100 and IBM below 140. Fear rose as indicated by a 12% rise in the VXO to close at 16.58 while crude oil slid 4% to close at 40.10 Hawkish rhetoric from some FOMC members seemed to throw water on the bull party mood from the day before.
Thursday, stocks fell in Asia 0.4%, plummeted 3.3% in Europe, and lost 1.3% in the U.S. on moderate volume. The VXO gained 15% to close at 19.03 while while the 10-Year U.S Treasury Bond yield shot up 7% to end the day at 2.33%. The supposed catalyst for this action in the U.S. and Europe was disappointment with Draghi’s statements and rising terror over the sudden hard line even from uber-dove, Janet Yellen. In contrast, precious metals gained 1% while their miners moved up twice that amount.
Friday, stocks fell in Asia 1.2%, fell in Europe 0.3%, but blasted 1.5% higher in the U.S. on moderate volume. Fear withered as evidenced by the one-day 20% decline of the VXO to end the week at 15.31. Precious metals came to life to gain 2.5% and their miners gained twice that amount. The 10-Year U.S Treasury Bond yield fell 2% to end the day at 2.28% while crude oil slid 2% to close at 40.14.
What sparked the stock market rally in the U.S.? According to one author, it was something that Draghi said. This rally came in spite of a strong jobs report. But not everyone sees a rosy future for the stock market.