MARKET WRAP: Stock markets plunged today and pushed Bond prices considerably higher in early trading. But as the session unfolded Mortgage Bonds hit fresh session highs, then they reversed course and headed lower. The 3.5% coupon rose 19bp to 101.66, just above where it closed yesterday. Today’s higher than expected Initial Claims and a plunge in the Philly Fed gave a big boost to the Bond markets but the rally soon fizzled out. Stocks plunged today on the aforementioned news. That coupled with Euro bank woes was the recipe for the sell-off. The Dow lost 419.63 to 10,990.58, the S&P 500 dropped 53.24 to 1,140.65 while the Nasdaq plunged 131.05 to settle at 2,380.43. Oil finished the turbulent session at $82.38/barrel down $5.20 as global recession fears could crimp demand. There are no economic reports tomorrow.
It’s a great time to own Gold : Stock markets were unchanged today giving the Bond markets a reason to run higher. The 3.5% coupon jumped 25bp to end at 101.56, but ended below resistance levels set last October. Tech shares were sold aggressively today and pushed money into Bonds and utility related stocks. The Dow saw a meager gain of 4.28 to end at 11,410.21, the S&P saw a paltry gain of 1.13 to 1,193.89 while the Nasdaq dropped 11.97 to end at 2,511.48. Oil saw a gain of 93 cents to $87.58/barrel on lower inventories while Gold closed at a record $1,791.20 up $8.80. Tomorrow’s data includes Initial Claims, CPI, Philly Fed Index and Existing Home Sales.
WOW. What a roller coaster on Wall street. Markets experienced extreme volatility once again today especially after the Fed announced its statement at 2:15pm ET. The Fed did not say that it would add any additional stimulus to the economy but Stocks bounced back after the horrific sell-off in recent days. Mortgage Bonds also rose today – our new focus is the 3.5% coupon rising 131bp to end at 101.22. The Monthly Bond Rollover will occur after the close of trading and will be reflected tomorrow. The Dow surged 429.92 to 11,239.77, the S&P 500 jumped 53.07 at 1,172.53 while the Nasdaq soared 124.83 to 2,482.52. Oil in after hours trading was $82.14/barrel down $2. There is no economic data tomorrow. The Treasury will sell $24B 10-yr notes tomorrow.
What a day in the markets today as Stocks plunged on fears of another recession due to weak economic data and as sellers said, “Get Me Out!” The Dow Jones Industrial Average fell 512.76 to end the session at 11383.68 down 10.5% from just July 21 and sending the Nasdaq, S&P 500 and the Dow into negative territory for the year. The S&P fell 60.27 to 1200.07 while the Nasdaq dropped 136.68 to 2,556.39. The 4% coupon jumped 81bp to end at 103.50. We will be switching our focus to the 3.5% in the next few business days. Oil was last seen in after hours trading down $5.48 to $86.45/barrel. Tomorrow’s Jobs Report sees 84K new jobs created in July and will be reported at 8:30am ET.