每日市場點評 --- June 13, 2008

Friday the 13th turns out to be a lucky day for investors. After a sell-off early in the week, the market essentially ended the week at the unchanged level mainly due to a sharp rebound in today’s trading. The Dow advanced 165 points or 1.4% while the Nasdaq gained 50 points. We got some mixed news on the economic front. The headline CPI increased 0.6% after a 0.2% gain in the previous month. Economists were looking for an increase of 0.5%. Excluding food and energy, core CPI increased 0.2%, matching economists’ expectation. For the past 12 months, CPI increased 4.2% while the core CPI advanced 2.3%. In another report, the Reuters/University of Michigan preliminary index of consumer sentiment fell to 56.7 in June, the lowest in 28 years and down from 59.8 in May. But apparently investors were willing to look past the dismal consumer confidence data today and instead focusing on positive developments in the US dollar and crude price.

Commodities and technologies were among the biggest gainers of the session. Financials, lagging the broad market most of the day, moved into positive territory during the last hour and gave the market a further boost. The US dollar index enjoyed its biggest weekly gain in years this week by moving up 2.3%. As for the euro, it advanced 2.6%, the biggest increase in 3 years and for the yen, it rose 3.2%, the most in almost 4 years. Interestingly, a dollar heaven didn’t result in a commodity hell. The CRB commodity index actually ended the week up by 1%, supported mostly by agriculture products. Treasuries, on the other hand, were not that lucky. The yields on 2-year note jumped 65 bps this week, the biggest 1-week increase in 26 years. The yields on the 10-year note fared a little better but it also jumped 34bps, the most in 5 years. Clearly, bond traders have increased their bets that the Fed is going to increase interest rates much sooner than originally thought. The market breath was positive today and the volume was light compared to previous few days.