Volatile Day in the Markets

by: Bill Cara

Equity market prices were extremely volatile on Wednesday, with major differences between the leading indexes.

At the close, the DJIA (+3.91 +0.06% to 6930.40) and S&P 500 (+1.76 +0.24% to 721.36) were close to being flat, but the tech laden NASDAQ (+13.36 +0.98% to 1371.64) and the commodities laden Toronto Composite (+130.61 +1.66% to 8011.02) and Venture Board (+5.35 +0.65% to 823.90) were strong.

By the end of the session in NY, the biggest industry winners were: Basic Materials (XLB +3.0%) and Financials (XLF +2.6%). Banks ($BKX +3.1%) and Broker-Dealers ($XBD +3.4%) boosted the Financials, and the Goldminers ($XAU +5.4%) boosted the Basic Materials sector. Healthcare (XLV -1.8%) dropped due to weakness in the Biotech ($BTK -1.6%).

Among the Cara 100 stocks that lifted, the biggest winners were Teck (TCK +13.0%), Deutsche Bank (DB +7.9%), [new Cara 100 entry] Buenaventura Gold (BVN +6.5%), and Goldcorp (GG +5.8%). HSBC (HBC -12.7%) was the biggest loser.

The US long bond ($USB -0.35% to 125.81) was weak but yields also sank. Yields on the 30-, 10-, and 5-year Treasuries closed at 3.657, 2.916, and 1.951 percent, respectively. The T-Bill yield was 0.220 percent.

The $USD dropped again, losing -1.33% to 87.59, and the Euro lifted +1.38% to 128.46. The Yen soared +1.53% to 102.86, and the Pound strengthened +0.95% to 138.84. The Cdn Loonie (-0.24% to 77.8) gave back a bit of the previous day’s large gain.

Crude Oil prices lost -$1.17/bbl to 45.81.

After dropping -$44.80/oz over the previous two days, $GOLD futures (+$14.80/oz to 910.70) were stronger.

Earlier in the day Thursday, Asia-Pacific equity markets were mixed: Japan (-2.41% to 7198.3), Shanghai China (-0.24% to 2133.9), Australia (0.27% to 3190.4), Hong Kong (+0.59% to 12001.5) and India, after being closed two days (+2.25% to 8343.8).

At 6:09am ET today, the French CAC (-2.31%), the German DAX (-2.28%), and the UK FTSE 100 (-1.67%) were giving back the gains of the past two days.

The spot prices at 6:31am ET (vs 6:30am ET Tuesday, two days ago) were for gold, palladium, platinum and silver: 913.00 (910.09); 195 (194); 1043.5 (1044); and 12.86 (12.74). These are almost unchanged.

The $USD futures were flat with the previous two mornings at the same hour: 88.385, and the Euro futures were at 127.89. Crude Oil futures (May) were at 43.89, softer during the past day.

DJIA equity futures (May) were soft (-62) at 6852.

Deutsche Bank lowered the rating from Buy to hold on utility Exelon (EXC -5.7% to $40.15 on +161% higher than average daily volume) and lowered the target to 53.

Also, Swiss drug maker Roche said it agreed with Genentech to buy the 44% that it doesn't already own for ~$46.8 billion. The price is $95. Genentech was replaced a couple days ago by Broadcom (BRCM), which has soared from $16.18 to $18.19 after I made the announcement.