MARKET COMMENT
Dave Fry at ETF Digest, January 29, 2009
Horrible economic data continues to gush forth as orders for Durable Goods, Unemployment Claims and housing data (sales down nearly 15%) all blew through lowered expectations.
Earnings were also negative from Allstate, Kodak, Qualcomm, Black & Decker and so forth were rotten.
The Treasury bond auction didn’t go too well despite the negative economic data.
Yesterday’s Fed statement basically stated they weren’t ready to monetize debt (buying Treasury bonds in the open market) just yet. However, they’re ready, willing and able to do so at any time. Instead they’re buying agency debt from distressed sellers who are (wink-wink) then buying Treasury bonds with the proceeds. Nevertheless, taxpayers wind-up with the junk and WS makes the vig.
So the end-of-month tape-painting party was sabotaged by logical news while volume was about average and breadth was as negative as you’d expect.
January has one more day to go and it will take a Herculean effort for bulls to save the month. If, as likely, bulls can’t then the so-called January Effect (as goes January, so goes the year) means a bad year ahead.
It’s interesting that bonds broke down today along with terrible economic data. Earnings remain terrible no matter how hard bulls try to spin it. The only thing they have going for them is that bears may be exhausted and markets are oversold—the latter being a conditions that can persist for a long period.
Northern Trust Co is going to close their newly launched 17 ETFs due to a lack of support and assets. It was strange they issued them given the ETF business was outside their core business, but it was stranger still they didn’t support during harder times.
Remember subscribers, no podcast this weekend.
Have a great weekend.
Disclaimer: The ETF Digest maintains a position in GLD.
