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The market started the new week in a relatively quiet mood. All three major indices closed the day within 0.3% from the unchanged levels. There was little economic news scheduled to be released but a potential capital injection into WaMu without government involvement along with several M&A announcements managed to keep the market in the positive territory for most of the day.
Commodities, following a sharp rebound in the CRB commodity index recently, continued to do well in today’s trading. The CRB index advanced for the third consecutive day and is back above 400. It is worth noting that with today’s $2 advance, the crude oil price is only inches away from its previous historical high reached on Mar 13th. Financials were also outperforming the broad market following the WaMu news. Treasuries were sold off and the yield curve continued to flatten. The US dollar was mixed: It gained some ground against the euro and the yen but weakened against several emerging currencies, especially the Chinese yuan. The yuan is set to break the 7 yuan/dollar mark within days based on recent trend. As for tomorrow, we are going to get the latest Fed minutes – a potential market mover.
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