Behind the Numbers: Month to Date Market Review (Sept.05)

Although our financial industry and media have worked diligently to have people focus on daily market swings, in my opinion markets are best monitored on a monthly, quarterly, and annual basis. Why? It takes out the noise, of which there is plenty.

In this spirit, I plan on providing a month-to-date review of market stats along with appropriate commentary on news of note from the prior week. I hope readers find this review beneficial. Feedback always welcome.

Equities (Friday 9/04/09 close, month-to-date return)

DJIA: 9441,  -.6%
Nasdaq: 2019,  +.5%
S&P 500: 1016, -.4%
MSCI Emerging Mkt Index: 844, 0.0%
DJ Global ex U.S.: 184, +3.3%

Commentary: after an initial selloff early in the week, the markets rallied on Thursday and Friday, primarily after the employment report. I place a heavy discount on this week’s trading activity given the very heavy vacation calendar and long holiday weekend. I remain in the camp that the equity markets will correct 5 to 7% from current levels.

Bonds/Interest Rates

2yr Treasury: .93%, down 5 basis points (1 basis point is .01%)
10yr Treasury: 3.44%, up 3 basis points

COY (High Yield ETF): 6.14, +1.5%
FMY (Mortgage ETF): 17.31, -.5%
ITE (Government ETF): 57.18, -1.0%
NXR (Municipal ETF): 14.09, 0.0%

Commentary: while interest rates gyrated during the week, the biggest development was the yield curve steepening. Why? What is going on? Two things. There is definitely an increased nervousness about the economic recovery. This anxiety is causing more investors to seek the safety of short maturity U.S. Treasuries. Additionally, the market has its regular 3yr, 10yr, and 30yr auctions next week. In the face of that supply, the street is trying to back up rates on the longer maturity paper (10yr and 30yr) to take it down at a more attractive rate.

U.S. Dollar

$/Yen: 93.02 vs 93.11 at August month end
Euro/Dollar: 1.4304 vs 1.4338 at August month end
U.S. Dollar Index: 78.20 vs 78.14

Commentary: minor moves up and down

Commodities

Oil: $67.79/barrel vs $69.93 at August month end
Gold: $996.1/oz. vs $952.4 at August month end

DJ-UBS Commodity Index: 122.93 vs 125.73 at month end

Commentary: in my opinion, the moves in commodities represent the strongest indication of global economic activity. The continued downtrend in oil specifically and commodities in general signifies to me a slowing in the global economy. Where is the money going? Gold. Why? Investors are getting nervous and gold is a safe haven.

About Larry Doyle 522 Articles

Larry Doyle embarked on his Wall Street career in 1983 as a mortgage-backed securities trader for The First Boston Corporation. He was involved in the growth and development of the secondary mortgage market from its near infancy.

After close to 7 years at First Boston, Larry joined Bear Stearns in early 1990 as a mortgage trader. In 1993, Larry was named a Senior Managing Director at the firm. He left Bear to join Union Bank of Switzerland in late 1996 as Head of Mortgage Trading.

In 1998, after 15 years of trading and precipitated by Swiss Bank’s takeover of UBS, Larry moved from trading to sales as a senior salesperson at Bank of America. His move into sales led him to the role as National Sales Manager for Securitized Products at JP Morgan Chase in 2000. He was integrally involved in developing the department, hiring 40 salespeople, and generating $300 million in sales revenue. He left JP Morgan in 2006.

Throughout his career, Larry eagerly engaged clients and colleagues. He has mentored dozens of junior colleagues, recruited at a number of colleges and universities, and interviewed hundreds. He has also had extensive public speaking experience. Additionally, Larry served as Chair of the Mortgage Trading Committee for the Public Securities Association (PSA) in the mid-90s.

Larry graduated Cum Laude, Phi Beta Kappa in 1983 from the College of the Holy Cross.

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