每日市场点评 --- April 16, 2008

The market treated bulls with a good Wednesday. All three major indices ended the day higher by more than 2%. The Nasdaq, which lagged the broad market recently, advanced 2.8%, the best among the big three. Even more impressive, the Dow Transportation Average hit a new high for 2008 and has gained 11% year-to-date despite last week’s earnings warning from UPS. The economic news of the day was mixed: Both headline and core CPI numbers matched with expectation; Housing Starts and Building Permits both missed expectation and were at the worst level since 1991; Industrial Production came better than expected while the Fed’s Beige Book indicated nine of the twelve Fed Districts have seen a slowdown in economic activity. On balance, the economic news was neutral at best. But it was really the positive earning results from Intel, JP Morgan and Wells Fargo that triggered today’s rally. The market sentiment entering into this earnings season was so low that even in-line results were considered good news.

All 10 major sectors registered a gain today and commodities again became the winner of the day. The CRB commodity index continued to move higher and is just inches away from the record high reached on Mar 13th. Interestingly, the VIX index closed at the lowest level in 2008 while the new highs list on NYSE hit the highest level so far this year. Treasuries were sold off sharply as investors reasoned that better returns can be found elsewhere. The US dollar hit a new historical low against the euro as higher than expected inflation in that region erased any hope for a rate cut in the near future. After the bell, IBM’s earnings results handily beat expectation but Merrill’s results along with several economic reports tomorrow morning can easily change the direction of the market. So play with caution!