Dow 10,860, NASDAQ 2,381, 10 year Treasury yield 2.61%, US Dollar to Euro equivalent $1.3494
September and this year look like a normal
stock market pattern with usual Federal Reserve adjustments. The
stock market tends to rise toward the end of September, closing
near the end-of-the-year highs (even with investors taking capital
gains or losses at the end of December)*.
The current stock market is functioning at lower levels than a few
years ago, of course, the result of a severe recession that
wipe-out of 1/3rd of world wealth. ^
From www.barrons.com, (the site is
subscription and the Barron's, 9/25/10 full article is otherwise
blocked). "As it happens, Bernanke's Aug. 27 speech has proved
to be a turning point, for the financial markets at least. The
headlong slide in long-Treasury yields has been halted, at least
temporarily, while stocks have rallied smartly. September,
reputedly the worst month for stocks*,
is shaping up as the strongest since April 2009, near the
beginning of equities' liftoff. According to Wilshire
Associates, the U.S. stock market is up 9.65% for the month,
adding some $1.2 trillion to equity investors' wealth.
JP Morgan Chase economists Bruce Kasman and
Robert Mellman observe in a research note that other factors are
affecting the markets, including less-dire economic reports and
prospects that November elections will bring a more pro-business
Congress. "However," they said, "market movements appear to be
directly responding to the signal from the Fed. In addition to
equities, that would include currencies and market-based
inflation indicators, which evidently took the Fed at its word.
The U.S. Dollar Index, or DXY, had a clear technical breakdown
on the charts— even with the Bank of Japan working to weaken the
yen. The euro also rose to its highest since April, close to
Historically September is considered the worst month for stock, that "market
return negative" long term seems to be only -1.5%. October can
be much more volatile. And, then again. (article and video from
"Nightly Business Report" PBS, 9/16/10). The real question for
me is not normal market behavior, but whether the regulations
and regulators will sufficiently protect investors going
Additional references ^
Where we go from here. Investment News article 9/24/10.
Technical end to the recession 6/2009 Los Angeles Business Examiner 9/25/10.
Personal investment strategy Personal Finance 9/25/10.
commentary areas above are my personal observation from having
been a registered representative (stock broker, registered
principal) as part of my total financial business over 25
years, and does not in any way constitute professional
Posted by Kathy Meeh