Sense on Cents

Charges of fraud at Goldman Sachs. Indications of a front organization utilized by Lehman Brothers. Rampant evidence of fraudulent mortgage lending occurring at Washington Mutual. An SEC OIG review of massive failure by the SEC in its oversight of Stanford Financial. Hell, even outside of the financial sector, we see evidence of regulatory failures within the automotive industry (Toyota) and in the mining tragedy that just occurred in West Virginia. Add it all up and all one can say is that our government has failed us. Are these failures mere mistakes, incompetence, or the result of willful neglect?

America deserves independent investigations across the board. How and why should Americans trust the markets in light of all these situations? The fact is, Americans do not trust the markets. That fact is reflected in the declining volumes on the exchanges. Although fewer people are playing, let’s review the market moves for the past week.

Welcome to our Sense on Cents Week in Review where I provide a streamlined recap of the month-to-date market returns. The stats provided are the week’s close (April 16th), March close, and the percentage change:

U.S. DOLLAR
$/Yen: 92.15 vs 93.46, -1.4%
Euro/Dollar: 1.3496 vs 1.3509, -0.1%
U.S. Dollar Index: 80.83 vs 81.07, -.3%

Commentary: the overall U.S. Dollar Index has largely been running in place for the last few weeks despite ongoing problems in the Euro-zone.

COMMODITIES
Oil: $82.92/barrel vs $83.30, -.5%
Gold: $1137.8/oz. vs $1113.7, +2.2%
Copper: $3.543 vs $3.550, -.2%
DJ-UBS Commodity Index: 135.13 vs 132.15, +2.2%

Commentary: oil, gold, and copper all gave ground this week in sync with other risk based assets, primarily equities. The overall commodities, in general, the DJ-UBS Commodity Index was actually up a bit on the week but is down approximately 3.0% on the year.

EQUITIES
DJIA: 11, 019 vs 10,856 +1.5%
Nasdaq: 2481 vs 2398,+3.5%
S&P 500: 1192 vs 1169, +2.0%
MSCI Emerging Mkt Index: 1032 vs 1009, +2.3%
DJ Global ex U.S.: 207.9 vs 204, +1.9%

Commentary: equities ended the week anywhere from down marginally (emerging and international markets) to up 1% (Nasdaq). The up days have generated light volume. Friday’s decline on the back of the Goldman Sachs fraud charge occurred on fairly heavy volume. The Fed’s experiment continues, and do not look for a change in Fed policy anytime soon. How deep and far reaching will the fraud charges on Wall Street spread? Will they rise into the executive offices? A failure to supervise on behalf of management is certainly worth serious investigation.

BONDS/INTEREST RATES

2yr Treasury: .96% vs 1.02%, -6 basis points or +.06%
10yr Treasury: 3.77% vs 3.83%, -6 basis points or +.06%
COY (High Yield): 6.85 vs 6.77 +1.2%
FMY (Mortgage): 18.33 vs 18.39, -.3%
ITE (Government): 57.62 vs 57.52, +.2%
NXR (Municipal): 14.15 vs 14.22, -.5%

Commentary: 10yr Treasury rates briefly touched 4.0% last week but have rallied since then on the heels of signs of disinflation, ongoing concerns in the Euro-zone, the charges against Goldman Sachs, a rise in jobless claims, and a surprising decline in consumer sentiment. Funny how the above developments bring rates down, while on the week equities as referenced above were effectively unchanged to slightly higher. The experiment marches on.

SUMMARY/CONCLUSION
The roller coaster continues in terms of economic data, market moves, and developments on our global economic landscape. Risks remain significant — all reports to the contrary aside. Navigate accordingly.

In regard to my ongoing pursuit of truth, transparency, and integrity on our economic landscape, please join me tonight (8-9pm ET) for what will be a fascinating discussion. No Quarter Radio’s Sense on Cents with Larry Doyle Is Having a Tea Party.

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Have a great day and weekend.

LD

This entry was posted on Sunday, April 18th, 2010 at 8:38 AM and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.