From Bonds to Oil

[Excerpted from Bill Cara's Daily Report]

Traders moved out of bonds and into oil on New Year’s Eve Day, while the US equity market lifted about one and a half percent on the final day of 2008.

2008 was a difficult year for buy-and-hold traders as the S&P dropped -38.6%, the NASDAQ Composite -40.8%, and the DJIA -33.9%.

On the final day, however, they all lifted: DJIA (+108.00 +1.25% to 8776.39), S&P 500 (+12.61 +1.42% to 903.25), and NASDAQ Composite (+26.33 +1.70% to 1577.03). The Toronto Composite and Venture Board also lifted +156.98 +1.78% to 8987.70 and +23.96 +3.10% to 797.02, respectively.

Earlier Thursday, the international equity markets were mostly closed.

In NY, all ten sectors were consistently up. The leader was the Financials (+3.2%), which included the Banks ($BKX +3.2%) and Broker-Dealers ($XBD +4.3%). The laggards, but still up almost +1.0%, were as expected on a strong day the healthcare and consumer staples sectors, which are the most defensive.

Of the industry groups, the winners were mostly things we all use: Tires +6.4%, Hotels & Motels +6.1%, Motion Pictures +5.9%, Printing Services +5.0%, Water Utilities +4.5%, Misc. Transportation +4.5%, Real Estate Operations +4.4% (including REITs +4.8%), Photography +4.1%, Rental & Leasing +3.9%, and Water Transportation +3.8%.

Volume was very light again except for the trade in US bonds and oil, where the volume was massive.

For the Cara 100 company stocks, Dow Chemical (DOW) was down -3.0% on +86% greater volume than the average. Most were winners: Brunswick Corp (BC +10.5% on +92% greater volume than average), and the electronic brokers again (OXPS +5.7% and IBKR +4.7%).

The US bonds plunged as yields popped, finally. The 30-year bond dropped -2.39% to 138.05. The yields on the 30-, 10-, and 5-year Treasuries were up sharply to 2.691, 2.244 and 1.551 percent, respectively. But these rates are still near historic lows.

In the forex market, the US Dollar gained +0.42% to 81.21 and the British Pound soared +1.69% to 146.54. Losers were the Euro -0.72% to 139.78, the Yen -0.36% to 110.30 and the Cdn Loonie -1.07% to 81.30.

Gold and silver precious metal prices, however, countered the $USD rise, closing higher: The year-end spot prices for gold, palladium, platinum and silver were 879.98, 182.5, 930, and 11.34. Only palladium was not strong. The $GOLD futures were up $14.30/oz to 884.30.

Crude Oil futures ($WTIC) gushed +$5.57/bbl to close the year at 44.60.

DJIA futures closed at 8727.

Comments

[auto44:]

I think most folks expect commodities to get sucked upwards due to inflation caused by high speed presses in Washington.

Jan 02 01:25 PM