Stocks endure modest declines during a session spent mostly mimicking the euro’s moves. Absence of economic data or other meaningful catalyst allows equity traders to essentially hit the “track currency” auto-pilot button for the day.
Weaker euro, USD gains translate into pullback for stocks. Noticed some ramped-up rhetoric on currencies as QE2 gets running, expect to hear a lot more in the days and weeks ahead. Weak day for financials and utilities; modest gains for energy and materials. Gold runs to another fresh high above $1,400/oz.
Dow Industrials slip 37.24 to 11406.84 in unremarkable volume, while Nasdaq Comp adds 1.07 to 2580.05. S&P 500 ends 2.60 lower at 1223.25.
There’s little to suggest that anything’s on the horizon to challenge EUR/USD’s dominant influence over the direction of US stocks. This mechanical, monotonous trade continues until further notice.
Verbal jousting over currencies has heated up in the wake of the Fed’s QE2 launch last week, with German finance minister Wolfgang Schaeuble firing off a fusillade in a Der Spiegel interview over the weekend, countered by a rather limp but pointed retort from President Obama today.
“It doesn’t add up when the Americans accuse the Chinese of currency manipulation and then, with the help of their central bank’s printing presses, artificially lower the value of the dollar,” Schaeuble said.
Got to admit, the gentleman has a point.
Meanwhile, President Obama responded by saying his and the Fed’s mandate “is to grow our economy, and that’s not just good for the U.S. That’s good for the world as a whole.”
Careful, Mr. President. Be very careful. As we are all too well (and perhaps painfully) aware, what’s bad for the US — like an asset bubble disguised as economic growth (see, um, housing) — is also bad, in fact, for the world as a whole. Continue reading…
Stock futures shaded a little lower premarket as the dollar gains some ground early, euro has softened following a strong runup last week and stock markets are slightly lower currently in Europe.
Thin calendar of economic data this week, flow of quarterly earnings reports taper off, so look
for equity markets to remain preoccupied with action in the currency markets, particularly ahead of G20 gathering later this week.
St Louis Fed’s Bullard, Dallas Fed’s Fisher and Fed Gov Warsh all scheduled to speak today.
USD index recently up 0.6%. S&P futures down 3.20; 10-yr note flat, yield at 2.53%.
Short on staffing this week at MT, so expect postings to be light.
J.P. Morgan reported some strong earnings today. But what this bloggers eye were some of the sub-numbers in the earnings report. The bank booked $1.8 billion in investment banking fees. But don’t be fooled – that wasn’t from big M&A advising. But $429 million was in advisory fees. Instead, that $1.3 billion + remaining fees […]
President Reagan’s former budget director David Stockman says Edward Snowden performed a heroic act, the Patriot Act should be repealed, and this whole spying-on-U.S.-citizens thing is a symptom of an out-of-control military-industrial complex. Click here to watch him go on YahooFinance. The author of “The Great Deformation: The Corruption of Capitalism in A […]