The sequester drama this week played out as a big flop. Ben Bernanke did his part to talk up the stock market as other Federal Reserve officials spoke voicing both dovish and hawkish tones. Stocks remained priced for perfection.
Monday, stocks in Asia rose 0.5% while in Europe they move up just slightly. In the U.S., stocks collapsed 2% on moderate volume. The VXO skyrocketed 36% to close at 18.74. Both the S&P 500 Index and the Dow Jones Industrial Index broke below key numerical boundaries. The 10-Year U.S. Treasury Bond rate dropped 3.6% to close below 1.9%. Precious metals jumped up 1.7%.
Tuesday, stocks in Asia dropped 0.7% and 1.4% in Europe. In the U.S., stocks rose 0.5% on low moderate volume and the VXO fell 12% to 16.44. Wednesday, Asian stocks fell 0.3% but European shares jumped 0.9% higher. U.S.stocks shot up 1.25% on low volume. VXO crashed nearly 15% further to close at 14.02. Both the S&P 500 Index and the Dow Jones Industrial Index broke below key numerical boundaries erasing the losses of the previous two days. IBM also scaled back above the $200 per share level.
Thursday Asia up 1.7% Europe rose just slightly. In the U.S. stocks closed flat on moderate volume. For the month, stocks were unchanged, but the 10-Year U.S. Treasury Bond rate dropped 5% to end at 1.89. Friday Asian stocks dropped 0.4%. As a harbinger of things to come, apparently socialist Europe has a serious problem after all. Stocks there dropped only slightly for the day. In the U.S., stocks closed unchanged on low volume.