Monday, stocks rose 1.2% in Asia and changed little in Europe as the U.S. markets were closed for Labor Day. Tuesday, stocks rose in Asia 0.6%, fell in Europe 0.4%, and 0.5% in the U.S on light volume. The VXO fell farther into la-la land to close at 10.32 while precious metals gained 1% and their miners rose twice that amount. The 10-Year U.S. Treasury Bond yield plummeted 4% to close at 1.54. You may have noticed the tight trading range of the major stock indices lately. Could this be the calm before the storm?
Wednesday, in Asia stocks rose 0.8%, in Europe the gained 0.3%, but in the U.S. the closed nearly unchanged on low volume. Thursday, stocks closed virtually unchanged in Asia, fell 0.4% in Europe, and closed little changed in the U.S. on light volume. The VXO rose 5% to close at 11.19. Precious metals lost about 1% and their miners declined twice that amount. The 10-Year U.S. Treasury Bond yield shot up 6% to close at 1.62.
Friday, stocks fell worldwide — in Asia and Europe 1.1% and in the U.S. 2.5% on moderate volume. The VXO skyrocketed 55% higher to close at 17.36 while precious metals miners fell 5%. The 10-Year U.S. Treasury Bond yield rose 3% to close at 1.67. What was the reason for this sharp drop? Some attribute it to hawkish statements from dovish FOMC committee member Rosengren adding likelihood to a September rate hike.