United States stocks soared which is considered to be a good comeback after the decline the day before. Treasuries declined due to an unexpected slump in the jobless claims and bigger than expected earnings were taming concern over the slowdown of the country’s economy as the European debt problem becomes bigger. The Swiss franc declined on plans to temporarily peg it next to the euro.
The Standard & Poor 500 index was up by 4.6% to 1,172.64 in the afternoon in New York. Stoxx Europe 600 index was up 3.2%, which is a comeback from a two year low. Treasuries declined as demand slowed down at an auction of 30 year bonds, putting the benchmark 10 year note yield high on to 22 basis points to 2.32%. The franc was down by 4.8% compared to sixteen other currencies. Gold was at $1,800 per ounce, while zinc and lead were up.
The Standard & Poor 500 came back after its decline by 1% from July 22 through yesterday despite the concerns about the debt problems of Europe and a political battle in the United States regarding the debt ceiling that made the S&P decide that the US should be downgraded in their credit rating. Both European Shares and the Russell 2000 index of small American companies fell by 20% from past highs. Two and 10 year Treasury yields were down to record lows.
According to Dan Veru of Palisade Capital Management, “If there is no recession, stocks are discounting an awful lot of bad news right now, the jobless claims report is another indication that the economy is growing at a moderate pace. Still, the market is very fragile. So much of what’s moving the market is centered in Europe. Is this is a repeat of the 2008 financial crisis? I don’t think so.”
Tags: Bounce Back, Palisade Capital Management, United States, moderate pace, debt problems, swiss franc, jobless claims report
