Stocks in Asia continued their decline — down 1.4% as the Nikkei led the way with a 3.7% plunge. In Europe, stocks lost 0.6%. In the U.S. they gained 0.6% on low moderate volume. Precious metals continued their recent rally rising 2% and miners up 3% to 4%. Here’s a pretty good article that puts the current asset bubble in perspective. Tuesday, stocks in Asia erased the previous day’s losses with a rise of 1.4% as the Nikkei recovered 2%. In Europe, stocks rose 0.3% and in the U.S. they fell 0.4%, breaking the twenty-one week Tuesday winning streak of the Dow Jones Industrial Average on low moderate volume. The VXO rose another 6% to close at 16.17. Gold and miners retraced about half of Monday’s gains.
Wednesday, the plunge continued in Japan and to a lesser extent in Asia with the Nikkei down 3.8% and Asia down 1.8%. The fire spread to Europe which fell 1.5% and the U.S. down 1.4% on low moderate volume. The Dow Jones Industrial Average dropped below 15,000, the S&P 500 Index closed in on breaching below the 1600 level, and IBM descended closer to $200 per share. Thursday, the Nikkei lost another 0.9% and closed below the 13,000 mark. Stocks in Asia followed suit with a 0.9% drop. Stocks in Europe dropped 1.0% after neither the ECB nor the BOE offered no further monetary easing measures. U.S. stocks seemingly ignored this bad news and rose 0.9% for no particular reason on low moderate volume. This buying spree lifted the Dow Jones Industrial Average back above the 15,000 mark by the close.
On Friday, stocks in Asia dropped sightly. Stocks rose 1.3% in Europe and 1.0% in the U.S. on low-moderate volume. The highly anticipated payroll data showed unemployment inching up to 7.6% but a few thousand more new jobs were added than expected. The number was still woefully low, and the quality of the jobs was less than stellar. We can say, I suppose, this is another bad news-is-good-news rally as “investors” bought stocks in hope that this news adds weight to the case for more prolonged easy money policy. Now, that’s perverse. Precious metals again were hammered, dropping about 3% while miners shed almost twice that. Despite all of the fireworks, for the week, securities were little changed thanks to the strong recovery of stocks Friday.