Wednesday Market Review

Another day of light volume in the markets as participants digested statements by Fed members and data while taking a breather.  Risk traded lower (except HY) as a result.  Will have to see what impact the political posturing by the US towards China has on US markets tomorrow.

Fixed Income:

Investment grade turned in its first day of decliners outpacing advancers in a while at 0.90x on lighter volume.  HY advancers trumped decliners by 1.37x on better volume.  Bigger gainers today were BP, GE and AIG in IG space and Lehman, F and Clear Channle in HY space.
Pretty light new issue calendar today as well.

US Govvies sold off a bit today, despite the strong 7yr auction.  10s-30s curve flattened as 10s lost a bit more than 30s.  Elsewhere in the world Japan, the UK and Australian govt markets had a positive day, while German and Hong Kong markets lost ground.





Equities:

Primary indicies were down across the board today with concerns over the banks continuing and expectations of weaker growth.  I expect that this weakness will continue, although I have been proven wrong thus far.

IT the only sector to produce positive returns today.  Financials and materials lead the pack lower today.  What has changed in the last two days is beyond me.

Small caps outperformed today, turning in a modestly positive performance.  Growth continues to outperform value (no surprise).












Currency:

Another day, another kick in the face for the dollar.  The Euro continues to surprise me. While one might impulsively say it is dollar weakness not euro strength, the EUR/JPY and EUR/GBP pairs contradict this.  Also interesting is the decline of the Loonie despite commodity strength.


Commodities:

Its all good here.





Suggestions?  Thoughts? Comments?  Would love to hear them.  Am I missing something?  Anyone want to provide "boots on the ground" insight?  Come on, I know you're out there.


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