Stocks slid early in the day as a worse than expected drop in Japanese exports and reemerging jitters out of Europe limited buying. The sell-off was stymied in the mid-afternoon after the Fed minutes hit the wires. The minutes bolstered the bull case that more quantitative easing is highly likely unless the economy turns around quickly. Although there have been several slightly better reports since the Fed meeting, the data is not likely enough to stop further intervention.
At the close the S&P 500 finished flat and the NASDAQ rallied by 0.2%. The reversal off the lows was anything but a bull stampede as volume levels remained dismal. The action of note was in the treasury and currency markets. Yields on the ten year note fell back to 1.72% as some money rotated back into the safety trade. The Euro and Yen both rallied as money flowed from dollar denominated assets. Further dollar printing will hurt the dollar and likely increase already high commodity prices. Evidence of the dollar debasement could be seen in gold (NYSEARCA:GLD) and silver (NYSEARCA:SLV) prices, up 1.1% and 1.9% respectively. We continue to believe that a new round of quantitative easing will not have the intended benefit envisioned by the Fed.
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