每日市場點評 --- July 30, 2008

Bulls are back on Wall Street. For the second session in a row, the market rallied massively with the Dow advancing another 186 points. The S&P 500 had an even better day in percentage terms with a gain of 1.7%. The Nasdaq was the weakest among the three but it also gained 10 points following a 55-point advance yesterday. Interestingly, the market had a very strong rally today despite an almost $5 rally in crude price. But if history is any guide, only one of the two rallies is real. We had some positive news on the job front. The ADP report for July showed a gain of 9K jobs while economists were looking for a decline of 60K. Breaking down into details, today’s ADP report showed a decrease of 65K jobs in goods-producing industries while service providers added 74K. We are going to get more important nonfarm payrolls report this Friday and historically there is little correlation between the government report and the ADP report. In the latest attempt to ease the credit crunch, the Fed extended its emergency lending program to investment banks through January as policy makers judged that “markets are still fragile”. The news had little impact on the market as it was widely anticipated.

Energies and basic materials were among the best performers for the session. The former was helped by a sharp rebound in crude price, which was triggered by a relatively bullish inventory report. On the losers’ list, we had names such as consumer cyclical and healthcare. The CRB commodity index rebounded sharply led by energies. The US dollar was little changed against most major currencies ahead of the advance reading for Q2 GDP that will be released tomorrow morning. Treasuries also had a quiet day ahead of the key economic reports. The VIX index slumped more than 3%. The market breath was positive on both NYSE and Nasdaq with above-average volume.