Overnight markets were higher, as were the Spooz, and the first hour of trading saw the market gain about 0.5%, plus or minus. By mid-morning (when I had to leave) the indices had backed off a little, but beneath the surface it was a mixed bag. Readers will have to check the box scores to see how the battle ended.
This morning’s “meaningful” macro data, that being the ADP employment report, was just about in line with expectations at 201,000 jobs versus the forecast of 208,000. Of course, that scrap of information was trumped by the fact that today is the end of the quarter, so it is a day when games are played as folks try to help their performance.
Away from stocks, at mid-morning the dollar was a bit stronger, with the yen on the weaker side, as the Japanese are temporarily breathing a sigh of relief. Fixed income was slightly higher and oil was off a percent.
Gold’s Success Has Clearly Gone to Its Feet
The precious metals were enjoying a rally of about 1% apiece when they sold off rather aggressively in a short space of time, apparently due to comments by the Bank of England’s executive director for markets, Paul Fisher. The headlines on Dow Jones read, “[BOE] Will Put Rates Up Before Selling Assets,” and “[BOE] Should Only Have One Active Policy Instrument at a Time.” That was followed by another headline that read, “BOE Will Raise Rates, Then Sell Assets As Stimulus Exit.”
All I have to say about that is, hiking rates from their current ridiculously low levels to something slightly higher is not that big of a deal, especially when no liquidity will be withdrawn. They will still be in easy money mode, but just charging a few pennies more. I found it interesting that the metals dove on that news while the Spooz ignored it. One market has gone nowhere for 10 years and is afraid of nothing, while the other has quadrupled, yet seems to be afraid of its own shadow. Go figure.