每日市场点评 --- April 9, 2008

The market closed lower on this Wednesday. The Dow, which was somewhat distorted by a 5% gain in Boeing shares, posted a modest loss of 0.4%. Nasdaq continued to be the worst performer among the big three and ended the day lower by more than 1%. Although financials got an early boost from the news that Citigroup is close to sell $12 billion or more than a quarter of its leveraged loans, reports that Goldman and Morgan saw their Level 3 assets climb during the latest quarter quickly changed investors’ sentiment. Record oil price along with a profit warning from UPS only made things from bad to worse.

Financials and transportations were the biggest laggards of the day. The latter was impacted not only by the UPS warning, but also the record crude oil price. Commodities had another great day. Crude oil price, helped by a surprisingly big drawdown in weekly inventory, touched $112 before closing at a new historical high. Other than crude oil, several other commodities including corn and copper also closed at their highest prices ever. The CRB commodity index jumped 10 points and now is only 2.5% below the record close reached on Mar 13th. The US dollar was mixed against major currencies while treasuries continued to rally. Traders now bet a 40% chance that the Fed is going to cut the key interest rate by 50 bps at its next meeting, up from only around 10% a week ago. It is interesting that back in Apr 1999, when the Internet mania was at its heyday, the total market cap for the energy industry was a little more than $400 billion(at the same time oil was traded at around $12 per barrel) and the market cap of two Internet companies, AOL and Yahoo, was worth more than $200 billion. Nine years later, the market cap for Exxon Mobil alone was close to $500 billion while AOL’s name was almost forgotten(well, to be fair it was probably still worth $20 billion based on the equity investment by Google). Indeed, things changed a lot during the last decade. What about the next?