Friends,
It’s hard to believe that anyone would be surprised that the “super-committee” was going to let us down this week, but traders decided to show their disapproval by selling stocks on Monday. Of course, Europe continues to wear down the psyche of the bulls with interest rates continuously under pressure in Italy and Spain. The result is another in a series of down days for stocks, with the Dow Jones Industrial Average down 248 points to finish the day at 11,547. The S&P 500 was down a painful 22 points to close at 1192. Gold was bludgeoned with the precious metal falling $42 to finish the day at $1683. Oil also lost ground down $.42 to close near $97.25.
As the day began, the news that the super-committee was at a stalemate sent stocks down over 330 Dow points. By early afternoon, Senator Baucus indicated that they were still working on something and stocks rallied just a bit, but in the end the damage was done. It is just a disgrace that politicians can’t look past ideologies and come to a compromise for the good of the nation, but we certainly didn’t expect anything more than what we got. I think traders decided to show their feelings today and let the politicians know that the markets can, and will, at some point make them do what they know they have to do. Unfortunately, we always have to have crisis before we can get any action. Stock traders have shown their disapproval. Bond traders, because we are the least ugly house on the block, have remained steadfast (keeping rates down), but God help us if that ever changes. In the meantime, the dollar rises and our bonds rally, not because of anything good we have done politically, but because the Europeans are amazingly more inept than we are.
We’ll see if traders can get past their temper tantrum today and begin to focus on the improving domestic economy. Of course, we are continuously on pins and needles when it comes to news out of Europe. We’ll let you know what transpires tomorrow.
Have a nice evening everyone.
