Investor Fear Returns

Monday, stocks gained 1.5% in Asia but declined slightly in Europe and closed little changed in the U.S. on 10B shares traded. The national debt has now climbed above $35 trillion!

Tuesday, stocks lost 0.4% in Asia but gained 0.4% in Europe and ended unchanged in the U.S. on 11B shares traded. Precious metals and their miners advanced 1%. In light of the previous day’s news here’s some food for thought regarding the extent investment asset valuations have been stretched.

Wednesday, stocks rose 2.3% in Asia, 0.8% in Europe, and 0.7% in the U.S. on 13B shares traded. The VIX fell 8% to close at 16.36. Precious metals gained 2% and their miners rose 3%. The S&P 500 index ended above the 5500 level while Apple closed above its 220 benchmark. The FOMC reported much the same non-committal stance.

Thursday, stocks lost 0.9$ in Asia, 1.3% in Europe, and 1.2% in the U.S. on 14B shares traded. The VIX rose 14% to close at 18.59. The 10-Year U.S. Treasury bond yield fell 3% to end at 3.98. Precious metals fell 1% and their miners dropped twice that amount. The S&P 500 index ended below the 5500 level while Apple and IBM closed below their 220 and 190 benchmarks.

Friday, stocks plummeted 4.0% in Asia, 2.8% in Europe, and 1.8% in the U.S. on 15B shares traded. The VIX shot up 26% to end at 23.39 and pivot from greed to fear. The 10-Year U.S. Treasury bond yield fell 5% to end at 3.79. Precious metals miners fell 2%. The Dow, NASDAQ and S&P 500 closed below their respective 40,000, 17,000, and 5400 benchmarks. Finally, the Federal Reserve balance sheet declined 27B to 7.18T.

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