Despite the early morning claims of some banks they have sufficient capital
to withstand this crisis, traders understand that a minor run on deposits would
sink some very large banks, and so the Banks ($BKX -6.7%) and Broker-Dealers
($XBD -6.5%) sold off through the session.
Renewed worries about oil prices and tightening credit further damaged the
Airlines ($XAL), which plunged -11.1%. REITs ($DJR -6.7%) also were sold.
Capital flowed out of risky equities into US Treasuries. The 30-year US Bond
($USB) gained +1.22% to 115.00. This is hot money and not long-term bond
investment.
Yesterday, the DJIA (-283.1 -2.43% to 11349.28), S&P 500 (-29.65 -2.31%
to 1252.54) and NASDAQ Composite (-45.77 -1.97% to 2280.11) were crushed. The
Financials (XLF -6.72%) led the way.
Crude Oil ($WTIC +1.05/bbl) recovered to 125.49, while $GOLD gained just 50
cents an oz to 922.30.
The Toronto Composite index ignored these gains and also sold off (-2.27% to
13206), while the Venture market sold down -1.73% to 2185.
Biotech ($BTK +0.62%) was the only industry in the NY markets that held up,
mostly because of the excitement caused by the Pfizer proposal a day earlier to
acquire the 44% shares in Genentech they don’t already own.
Cara 100 stocks on the rise were QCOM (+17.0%) and NOK (+2.2%) due to a
settlement of lawsuits between the parties, which should help both these
companies. On the Cara 100 losing side, the worst were the Indian banks IBN
(-10.6%) and HDB (-8.3%). IBN (ICICI) reports today.
On the economic front today, traders will be watching durable goods, consumer
sentiment, and new home sales.
Earlier today, the Asia-Pacific markets all followed yesterday’s US market
sell-off. Tokyo (-1.97% to 13334.8), Shanghai (-1.55% to 2865.1), Hong Kong
(-1.50% to 22740.7), Australia (-3.03% to 5031.0) and India (-3.40% to 14274.9)
were all hit hard by the selling.
In Europe this morning at 8:41am ET (1345 GMT), there are further losses, but
these have moderated in the past few minutes following the release of better
than expected US durable goods data. The UK FTSE is down -0.38% to 5343, the
French CAC +0.21% to 4357, and the German DAX -0.74% to 6393.
Crude Oil futures this morning are up +$0.76/bbl to 126.25. The $USD is quiet
at $0.7297, while the Euro is at 1.5659. DJIA futures are up +28 to 11379, based
on the Durable Goods Orders data that was published a couple minutes ago.
At 8.50am ET, Gold, palladium, platinum and silver spot prices are presently
at: 928.25, 384, 1729 and 17.37 respectively, which are close to yesterday
morning’s prices.
