每日市場點評 --- July 31, 2008

The market finished the final session of the month in a downbeat tone. The Dow posted a loss of 206 points, essentially giving up almost half of the gains from the previous two sessions. The Nasdaq fared relatively well and only lost 0.2%. The S&P 500 was somewhere in the middle with a loss of 1.3%. As for the month of July, the S&P 500 lost 1% after rebounding from a 2-year low reached early and the Dow was actually up fractionally for the month. We had a busy day in terms of economic news. But unfortunately, most of them failed to impress investors. Start with the weekly jobless claims. The figure of adjusted initial claims for the week ending July 26 came at 448K, the highest in 3 years. Economists were looking for a number close to 400K. The number for continuing claims, meanwhile, jumped 185K to a seasonally adjusted 3.282 million. The numbers didn’t bode well for tomorrow’s all-important nonfarm payrolls report. Move on, we had a chance to look at the Q2 GDP. Here the picture was not looking rosy either. The initial reading in Q2 GDP indicates that the economy was growing at an annual pace of 1.9% in Q2 vs. 2.3% expected. In fact, if it were not helped by the 2.4% contribution in net exports, which benefited greatly from a weak dollar, the economy would have contracted at a 0.5% pace. Previous quarters’ GDP figures were also revised down. The final quarter of 2007 was revised to -0.2% from the original estimation of 0.6%, confirming the views on Wall Street that the contraction actually started late last year. Finally, the Chicago PMI came at 50.8 vs. 49.0. The prices paid component surpassed 90 for the first time since 1980.

Healthcare was the only major sector that finished the session in green. On the losers’ list, we had names like energies and consumer staples. The huge rally in energies yesterday turned out to be a one-day event. The CRB commodity index ended the session slightly lower as weakness in energies was partially offset by strength in precious metals. The US dollar was little changed. Treasuries rallied with the weak economic news. The VIX index jumped more than 8% and closed at 22.94. For the month, it was actually lower by 1 point. The market breath was negative on both NYSE and Nasdaq.