每日市場點評 --- July 11, 2008

The market started this week in a volatile fashion only to see it finish even more so. The Dow was down more than 250 points at one point and was briefly in the positive territory at another. At close, it was somewhere in the middle by losing 128 points. The S&P 500 fared similarly and posted a loss of 1.1% for the session. As for the week, the Dow was off by 180 points while the S&P 500 lost almost 2%. The news on the economic front was mixed. Certainly few investors paid attention to them today as the market was driven purely by volatility. But we will recap it here anyway. Start with monthly trade figure. The trade deficit came at $59.8 billion, actually better than $62.5 billion expected despite a record $31.2 billion spent on foreign crude oil. Excluding the impact of inflation, the trade deficit was $43.6 billion, the lowest since October 2002. As the real trade deficit is used in calculating GDP, it is quite likely we will see economists revise up Q2 GDP figure in the next few weeks. In a separate report, prices of imported goods rose 2.6% in June from the previous month. On a year-over-year basis, prices have increased 20.5%. Finally, the preliminary reading on Michigan consumer sentiment survey came at 56.6 vs. 55.5 expected.

Financials and consumer cyclicals were among the worst performers in today’s session. The former was heavily influenced by activities in two GSEs, which losted as much as 50% before recovering most of their losses by close. Basic materials and energies fared relatively better. The CRB commodity index finished the session modestly higher. Crude price earlier touched a new high. Treasuries didn’t have a typical flight to quality day as bond traders were afraid that the US government might issue more debt to rescue the two GSEs. And that would mean more supply to the debt market. The US dollar was lower against most major currencies but was off its worst level. The VIX index jumped almost 2 points. And new lows on NYSE and Nasdaq exceeded 1200 issues.