SamTrader1
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Equities
The Nikkei bounced back following Tuesday’s crash, surging 5.7% to close at 9094. The index remains 11% below Friday’s close. Around Asia, markets rebounded, as the Kospi gained 1.8%, the Shanghai Composite rose 1.2% and the ASX 200 ended .7% higher. The Hang Seng ended up just .1%.
European markets tumbled, uninspired by the short squeeze rally in Asia. The FTSE sank 1.7% to 5598 and the Dax dropped 2%. Moody’s downgraded Portugal’s debt rating, pressuring banking shares.
US markets took their cue from Europe, sending markets to their lowest level of the year. The Dow plummeted 242 points, closing at 11613, and had been down 300 points in the early afternoon. The S&P dropped 2%, while Nasdaq fell 1.9% The VIX surged to 29, signaling a sharp in investor fear.
Dow Tumbles More Than 240 Points
Markets tumbled after US Energy Secretary, Steven Chu, said he believed a partial meltdown had occurred in Japan.
Dow heavyweight, IBM, dropped 3.8% and tech leader, Apple, slumped 4.5% following analyst downgrades.
Treasuries and Commodities
Bonds rose as investors piled into safe haven treasuries. 10-year notes rose 27/32 pushing the yield down to 3.21%, and 30-year notes rose 1 6/32 to yield 4.38%.
Commodities recovered from Tuesday’s selloff. US crude rose 1.24 to 98.42, and Brent crude added 2.34 to 110.93. Gasoline futures gained 1.8% to 2.8532.
Metals were mostly higher, with copper leading the gains, up 1.1% to 4.1825. Gold closed up 3.90 to 1396.70, and silver inched up .2%.
Agricultural futures were mixed, with sugar and cotton both down more than 3%, while soybeans gained 1.3%.
Currencies
The Yen rallied 1.2% to test record highs of 79.75, set back in 1995, but failed to break through. Nonetheless a breakout to new highs is almost a certainty and is just a matter of time.
The Euro slipped .6%, as Portugal’s downgrade had little impact on the market. The Pound eased .3%, while the Australian dollar dropped another .6%, as the AUDJPY carry trade continues to unwind.
The Swiss Franc rallied to new record highs, climbing .9% to .9086 as traders poured into the safe haven currency.
Economic Outlook
Massive disruptions in Japanese manufacturing and trade are likely to have a sizable impact on European and American companies. On the other hand, Asian companies might benefit as Japanese companies shift production to other countries around the region.
Housing starts fell 22.5%, their biggest drop in 27 years, and mortgage applications fell .7%, spelling bad news for the housing sector. PPI rose 1.6%, compared to .8% in January.
Thursday’s heavy economic calendar will include CPI, Industrial Production, Leading Indicators, and weekly jobless claims.
Earnings are due from Fedex and Nike.
The Nikkei bounced back following Tuesday’s crash, surging 5.7% to close at 9094. The index remains 11% below Friday’s close. Around Asia, markets rebounded, as the Kospi gained 1.8%, the Shanghai Composite rose 1.2% and the ASX 200 ended .7% higher. The Hang Seng ended up just .1%.
European markets tumbled, uninspired by the short squeeze rally in Asia. The FTSE sank 1.7% to 5598 and the Dax dropped 2%. Moody’s downgraded Portugal’s debt rating, pressuring banking shares.
US markets took their cue from Europe, sending markets to their lowest level of the year. The Dow plummeted 242 points, closing at 11613, and had been down 300 points in the early afternoon. The S&P dropped 2%, while Nasdaq fell 1.9% The VIX surged to 29, signaling a sharp in investor fear.
Dow Tumbles More Than 240 Points
Markets tumbled after US Energy Secretary, Steven Chu, said he believed a partial meltdown had occurred in Japan.
Dow heavyweight, IBM, dropped 3.8% and tech leader, Apple, slumped 4.5% following analyst downgrades.
Treasuries and Commodities
Bonds rose as investors piled into safe haven treasuries. 10-year notes rose 27/32 pushing the yield down to 3.21%, and 30-year notes rose 1 6/32 to yield 4.38%.
Commodities recovered from Tuesday’s selloff. US crude rose 1.24 to 98.42, and Brent crude added 2.34 to 110.93. Gasoline futures gained 1.8% to 2.8532.
Metals were mostly higher, with copper leading the gains, up 1.1% to 4.1825. Gold closed up 3.90 to 1396.70, and silver inched up .2%.
Agricultural futures were mixed, with sugar and cotton both down more than 3%, while soybeans gained 1.3%.
Currencies
The Yen rallied 1.2% to test record highs of 79.75, set back in 1995, but failed to break through. Nonetheless a breakout to new highs is almost a certainty and is just a matter of time.
The Euro slipped .6%, as Portugal’s downgrade had little impact on the market. The Pound eased .3%, while the Australian dollar dropped another .6%, as the AUDJPY carry trade continues to unwind.
The Swiss Franc rallied to new record highs, climbing .9% to .9086 as traders poured into the safe haven currency.
Economic Outlook
Massive disruptions in Japanese manufacturing and trade are likely to have a sizable impact on European and American companies. On the other hand, Asian companies might benefit as Japanese companies shift production to other countries around the region.
Housing starts fell 22.5%, their biggest drop in 27 years, and mortgage applications fell .7%, spelling bad news for the housing sector. PPI rose 1.6%, compared to .8% in January.
Thursday’s heavy economic calendar will include CPI, Industrial Production, Leading Indicators, and weekly jobless claims.
Earnings are due from Fedex and Nike.
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