Midday Market Update
Posted by Larry Doyle on February 5, 2009 3:01 PM |
After the Initial Jobless Claims report this morning came in decidely weaker than expected, the equity markets sold off and bonds rallied.
As the day has worn on, those moves have reversed. Let’s provide an update and some commentary:
Most sectors of the stock market are now up 1.5-2% on the day. I am honestly not reading anything into these moves. I believe this move upward is nothing more than a squaring of positions in front of tomorrow’s highly anticipated January Employment Report.
This sector of the market is facing enormous supply next week so any move upward will likely bring in sellers to set up for that supply. Currently, the 10yr treasury yields 2.9%. That rate is up significantly over the last month, but close to unchanged on the day.
The dollar is doing a touch better versus the Japanese Yen and is marking time versus the Euro. Again, I view this movement as more a squaring of positions than a key turnaround in dollar weakness versuss yen strength.
Much like the overall sectors, specific groups which have underperformed (consumer finance, life insurance, retailers) are doing better today, while precious metals are underperforming.
The price action across all sectors is consistent. Traders are squaring positions and mitigating risk in front of the employment report tomorrow.