Monday, stocks in Asia rose slightly. In Europe they did little. The stock market was closed in the U.S for President’s Day. Tuesday, stocks traded flat in Asia but roared up 1.1% in Europe and in the U.S. 0.7% on hope. Volume was low moderate. The VXO plummeted over 4% to the unsustainable level of 11.37. Precious metals dropped over 1%. Wednesday, Asian stocks shot up again, rising 1% while in Europe they dropped 0.3%. U.S. stocks nosedived 1.3% on low moderate volume after the FOMC notes hinted of withdrawing QE sooner than expected. VXO rocketed skyward nearly 23% to the still very tame 13.97. The Dow Jones Industrial Average slid well below the 14000 level and IBM again fell below $200 per share. Precious metals plummeted over 3.5%. Here’s a good article that puts the current stock market advance into perspective. From the gross understatement department, we have the following: “Valuations appear a bit high at these levels.”
On Thursday, Asian stocks caught the downdraft from the west and dropped 1.7% to erase most of the gains logged during the previous days of the week. The carnage continued in Europe, with stocks losing 1.5%. In the U.S. they dropped 0.8%, leaving the S&P 500 Index just a couple of points above the 1500 level on low moderate volume. The VXO pressed over 6% higher to close at 14.81, the 10-Year U.S. Treasury Bond rate fell below the 2% level to close at 1.98, and precious metals recovered a bit—rising 1.8%. Friday, stocks in Asia closed unchanged while those in Europe shot up 1.2%. Here’s a good article that characterizes QE then and, by implication, now as a Ponzi Scheme. In the U.S., stocks charged back 1% on low volume as the VXO plummeted 8%, and IBM managed to finish back above the magic 200 level while the Dow Jones Industrial Average closed just above the 14000 level.
For the week VXO rose 15%, stocks declined slightly, but precious metals lost more than 2%.