Bulls Ruling The Roost
Stocks jumped again today – the bull market is still ruling the roost – and this was driven because the “stress tests” were not thought to be too bad for the banks. Huh????
Bonds, the Dollar and Gold went sideways today.
Oil and gasoline jumped in concert with the stock market. The real message for stocks and for energy is that the recession is dead, and the economy is going to come back strong. So, the relationship between a strong economy (as measured by the stock market) and oil and gasoline is very positive. Interpretation…..you can count on higher energy prices if and when the economy really does come back.
In the news today……
Job Losses – were reported this morning, and the numbers were fairly good. While 708,000 jobs were lost in March, April came in at 491,000 jobs lost. This was reported before the stock market opened, and caused the market to open up. This number will be revised next month – the numbers always are revised as better data comes in. However, I personally would have expected job losses in April to come in the 600,000 area. But, let’s call this what it is – a very bad piece of information for the economy as a whole as more people come onto welfare and are not paying taxes any longer.
Homes Underwater – 21.9% of all US homeowners have home values less than their mortgage (i.e. are underwater). However, take the source of this information into account. This news item comes from Zillow, and my personal observation is that Zillow does not have accurate home value information. However, if this is true, or nearly true, this means that when any of these folks lose their job, they may abandon their home and cause further foreclosures. This statistic causes a negative drag on the US economy, and a lot of anxiety in the public.
Bank of America – needs $34.9B more money in capital to meet the government requirement found by stress tests. This means that BofA will be under the thumb of the government for a long time to come, in spite of the CEO’s pronouncement that everything was okay – made only a couple of weeks ago. I would guess his days is office are numbered.
Here are the last numbers for today:
Dow Jones 30 Industrial – 8512 (up 101 points)
10 Year Treasury Bond – 3.15% (down 0.01%)
Euro – $1.3316
Gold – $911 (up $7)
Oil – $56.30 (up $2.20)
Gasoline $1.63 (up $0.06)