Markets See Record 4 Week Gains

Stocks closed Friday's session higher on a lightly-traded day, and the DJIA (Friday +39.51 +0.50% to 8017.59) and S&P 500 (Friday +8.12 +0.97% to 842.50) saw their largest four-week gains since 1933. The NASDAQ (Friday +19.24 +1.20% to 1621.87) saw its best four week gains ever.

One week ago and four weeks ago, when I opined that the equity market was lifting amidst all the negative economic data and yada yada from Talking Heads, the DJIA (7776.18) (6626.94), S&P (815.94) (683.38), and NASDAQ (1545.20) (1293.85) were much lower. I continued to advise to watch the data and ignore the economists who were being paid to agitate the public.

[March 28 Report] In New York at the close this Friday (compared to the prior Friday’s close), the DJIA (-148.38 -1.87% to 7776.18) (7278.38); S&P 500 (-16.92 -2.03% to 815.94) (768.54); and NASDAQ (-41.80 -2.63% to 1545.20) (1457.27) were lower on the day, but with the exception of a few stocks in the DJIA index, were higher on the week.

The Toronto Composite (-174.44 -1.94% to 8821.06) (8506.35), and Venture Board (-13.00 -1.33% to 961.02) (901.80) were also sharply down on the day, like a week ago Friday, but much higher Week over Week.

So, the rally goes on and most people are thinking it’s not. Interesting.

… The closing DJIA futures were: 7762 (compared to 7215 a week earlier), which was down -87 this Friday but also much higher on the week. So the beat goes on, but the people are led to believe it doesn’t… As I say; interesting.

[March 23 Report] [6:51am ET] TAP, TAP, TAP… BOOM. You must be deaf if you don’t hear the opening shots of the next Bull phase of the equity markets.

[March 7 Report] Several markets should be in sync; the US dollar should fall, crude oil and other commodities should move higher, and US bonds should decline meaning interest rates are rising. The confluence of these outcomes would signal equity markets are ready to drive higher.

The Toronto Composite Index (-7.38 -0.08% to 9065.76) and Venture Board (-2.68 -0.27% to 975.59) were lower on the day, but much higher over one week and four weeks: (8821.06) (7591.47), and (961.02) (829.12).

In international equity markets, the closing weekly prices (versus 1-week and 4-week closes) all showed major gains: Australia @ 3674.0 (3615.6) (3111.7); Shanghai @ 2419.8 (2374.4)(2193.0); Hong Kong @ 14545.7 (14119.5) (11921.5); India @ 10348.8 (10018.1) (8325.8); Japan @ 8749.8 (8627.0) (7173.1); France @ 2958.7 (2840.6) (2534.5); Germany @ 4385.0 (4203.6) (3666.4); UK @ 4029.7 (3898.9) (3530.7); and Brazil @ 44391.0 () (37105.1).

The leaders in the Cara 100 on Friday were Research In Motion (RIMM +20.8%), Vimpel-Communications (VCP +12.5%), Dow Chemical (DOW +10.7%), and Dell Computer (DELL +8.6%). The losers were mostly gold and silver related, Kinross (KGC -7.1%), Silver Wheaton (SLW -6.7%), Buenaventura (BVN -4.9%) and Goldcorp (GG -4.8%) and the drugmaker Bristol-Myers (BMY -5.4%).

March employment data was the primary focus during Friday's session. Weighing on the markets was a decline of -663,000 jobs in March, and unemployment rates rose to +8.5%, the highest level in 25 years. Exactly one year ago today, after March unemployment had moved from 4.8% to 5.1%, I forecasted unemployment would hit +8.75% within 24 months and there was widespread disbelief. It is almost there after just 12 months.

The ISM non-manufacturing index contracted more than expected and showed continued weakness in the service sector, which represents about 80% of US economic activity.

The Financial sector (XLF +4.1%) was by far the strongest, and this was led by REITs ($DJR +8.6%). The Healthcare sector (XLV -1.7%) was the only decliner, led by Drugmakers ($DRG -1.8%) and Biotech ($BTK -1.5%).

The industry group suffering the biggest loss on the day was Goldminers ($XAU -5.1%).

In a presentation today in Richmond, Fed Chairman Bernanke did not address the jump in unemployment and job losses in March, but he said that the Fed would use all of its tools to stabilize markets for an economic recovery.

Fannie Mae (FNM $0.70) reported today that its refinancing volume nearly doubled to $77 billion in March from $41 billion in February, the largest increase since 2003. Mortgages in the US that are non-current (ie, delinquent) lifted above +10% for the first time in years. The Federal Housing Administration (FHA) said that rising mortgage defaults could force it to seek a taxpayer bailout.

Crude Oil (52.51 -0.13/bbl) was slightly lower, while the $USD dropped -0.35% to 84.17. Closing May futures were 52.38.

US Treasury yields on the 30-, 10-, and 5-year lifted (compared to prior Friday rate) to 3.721 (3.618), 2.907 (2.761), and 1.885 (1.799), respectively. The long bond ($USB) dropped -1.68% to 126.98 (vs 128.55 the prior Friday close).

$Gold dropped -$11.00/oz to close at 893.30, which is now touching the 880-890 technical support level.

Weekly closing Spot (cash) market prices (compared to the prior week’s close) for gold, palladium, platinum and silver were: 893.9 (922.6), 217.0 (217.0), 1156.0 (1125), and 12.75 (13.32). These prices are near support.

The closing DJIA futures were 7983 vs 7762 a week earlier.

Comments

[Prudent Man...:]

Even a stopped clock is correct twice a day. Unemployment may be a lagging indicator but for how long does it lag?

The IBM/Sun deal is off. Remarkable what "Due Diligence" uncovers when you have skin in the game. Unfortunately, outside "independent" auditor don't have any skin in the game except the fee paid by the defrauder.

Apr 05 06:44 PM

[tema:]

You did a lot of talking but I didn't hear any predictions...were your opinions hard to read 1 and 4 weeks ago? I wonder!!!

Apr 05 10:50 PM

[User 389615:]

On Apr 05 10:50 PM tema wrote:

> You did a lot of talking but I didn't hear any predictions...were
> your opinions hard to read 1 and 4 weeks ago? I wonder!!!

Even when I re-publish comments in an article, it is clear that some people don't read, but are willing to put down the author, which is why I don't care if SA picks up excepts from my blog, and why I almost never read the comments.

[March 23 Report] [6:51am ET] TAP, TAP, TAP… BOOM. You must be deaf if you don’t hear the opening shots of the next Bull phase of the equity markets.

Apr 06 10:05 AM

[tema:]

March 23 we were already up 20%. Your call on March 7 is hazy. What are you saying in this article? I'm sorry but I can't read between the line!


On Apr 06 10:05 AM User 389615 wrote:

> On Apr 05 10:50 PM tema wrote:

Apr 06 11:01 PM