DIA -.66%, SPY -.66% QQQQ -.80%
10-Year Treasury +12/32, yielding 4.59%
The markets are not happy right now. A major brokerage firm stated it was a good time to take profits in the construction sector. This news sent DJIA member Caterpillar down 4%, taking the Dow with it. Good news from Dow members HP and AIG (HP selected a new President and AIG got rid of a troubled executive) did not help to prevent the loss. On the NYSE, 65% of issues declined and 74% of the volume was negative. The NASDAW was just as bad with 70% of the issues decling and 76% of the volume down. The DOW and S&P 500 have been declining since mid-February, and the NASDAQ has been treading water over the same time frame.
The 10-year Treasury rose 12/32, to yield 4.59%.
Treasuries benefitted from the stock market sell-off. When investors start to get spooked by the stock market, they purchase Treasuries because they are a safer investment. Additionally, the Treasury market has gotten a bit oversold, so a rally at this point makes technical sense. Also adding to the rally was the consumer sentiment number (see below), which indicates consumers may start to slow their spending. This would take some of the inflationary pressures out of the economy.
Oil increased .94%, closing at 54.26/bbl. OPEC announced it would not increase production, although they would have to pump 1 million more barrels a day to keep pace with increased demand. (This statement proves that speaking out of both sides of your mouth is not a purely Western concept.) The last time OPEC announced a production increase, the market rallied when technically it should have sold off (more production = more supply = lower prices.) The previous price increase on a production increase indicates that OPEC does not have as much control over the market as they would like the world to believe. By not formally increasing production, OPEC as giving themselves some political room to manuever should a formal production increase be necessary over the coming months.
The dollar rallied .31% verses the Yen, but remained practically unchanged versus the Euro. Japan announced a higher unemployment rate than projected as well as a drop in consumer spending. This news led traders to believe the Japanese economy may not be coming out of recession yet. This would make the dollar more valuable verses the Yen. Also of note is the perception in the currency markets the Fed may by poised to increase rates at a clip faster than the recent 25 basis point moves.
The Conference Board reported that "The Conference Board's Consumer Confidence Index, which had declined in February, lost more ground in March. The Index now stands at 102.4 (1985=100), down from 104.4 in February. The Present Situation Index dipped to 115.6 from 116.8. The Expectations Index declined to 93.7 from 96.1 last month."
This number has been right around the 100-105 level for the last 3 months. Personally, I don't put as much stock in the slightly downward tick as the market seemed to today. I would personally be more concerned if the number dropped by 5-10 points rather than 2.