Tuesday, September 15, 2009

Evening Briefing for September 15th

* MARKET THEMES FROM TUESDAY: After weakness in the first half hour of trading took us back to overnight lows, selling pressure abated and buying interest dominated for the rest of the session. That took us to new bull highs in the major indexes, with advancing stocks leading decliners by over 1200 issues. Gold and oil were strong on the day; 10-year Treasury yields opened higher and stayed range bound; and the U.S. dollar weakened once again. The market strength was broad, with 1725 new 65-day highs against 105 lows. Interestingly, though, only 21 stocks in my basket were up from the open, while 19 were down. The health care, financial, and consumer staples sectors were all down from open to close. That suggests sector rotation to me, rather than uniform strength. I will be watching the market closely early on Wednesday to see if such selectivity continues. Market wrap here.

* OVERSEAS/OVERNIGHT NUMBERS: BOJ interest rate announcement; 3:00 AM CT - Italy, CPI; 3:30 AM CT - Great Britain, unemployment and average earnings; 4:00 AM CT - EU, consumer prices; 7:30 AM CT - Canada, factory shipments; 6:50 PM CT - Japan, Tertiary Index of industrial activity. Earnings due out on Wednesday can be found here.


-- PIMCO buying government debt;

-- Continued problems with moral hazard in the financial system;

-- Credit card losses worse than worst case scenarios in bank stress tests;

-- Thoughts on the dollar and the carry trade;

-- Markets to be tested as government support for economy is withdrawn.