每日市場點評 --- June 24, 2008

The market ended the session modestly lower ahead of tomorrow’s FOMC decision, which is scheduled to be released at 2:15pm. The Nasdaq, which has been outperforming the rest of the market most time this quarter, slumped 17 points or 0.7% while both the Dow and the S&P 500 were off by 0.3%. After several quiet days, we got some latest readings on the economic front. Unfortunately, there is really nothing to cheer about. Start with the Conference Board’s confidence index, which fell to 50.4 in June from 58.1 in May. That was the lowest level in more than 16 years. The share of consumers who said jobs are plentiful fell to 14.1% from 16.1% in the previous month. On the other hand, those saying jobs are hard to get increased to 30.5% from 28.3%. Buying plans over the next six months for automobiles, houses, appliances and vacations all declined. In a separate report provided by S&P/Case-Shiller, home prices in 20 cities dropped 15.3% in April from a year earlier. On a monthly basis, the rate of decline slowed to 1.4% from 2.2% in March, which was seen by some as a bottoming sign (of course, we have had quite a few such signs already but none is right so far). If we are pressed to find another positive sign from the report, it was the number of cities showed a gain in prices in April compared with March. We had 8 such cities in April compared to only 2 in March.

Financials and healthcares were among the only major sectors that managed to post a gain. The former was beaten up so badly with many issues down more than 20% in June alone. At yesterday’s closing price, XLF, which is a financial ETF, was almost 25% below the 200-day moving average so a short-term rebound was well deserved. Interestingly, we had commodities on the loser’s list along with transportations, which were dragged by a profit warning from UPS late yesterday. Commodities facing widespread sell-off without obvious reasons require some special attention. Can it mean that money finally starts to move out from the red-hot sector and into somewhere else? It is certainly too early to make such a call but that’s something one should keep in mind. The CRB commodity index was little changed after recent runs. The US dollar was lower against most major currencies while treasuries rallied ahead of tomorrow’s critical Fed meeting. The VIX index dropped slightly today. The market breath was neutral to negative with heavier volume compared with yesterday.