每日市场点评 --- July 17, 2008

The market continued to rally on this Thursday. The Dow, after gaining 276 points yesterday, added another 207 points. In fact, Dow’s two-day 4.4% gain was the best two-day performance since October 15, 2002. The Nasdaq was not falling behind by adding 1.2% on top of yesterday’s 3%+ gain. Most economic news for the session was on the positive side. Start with the weekly jobless claims. The initial claims for the week ending July 12th came at 366K, slightly less than 380K expected. The number for continuing claims, meanwhile, decreased 81K to 3.122 million. We also received some surprisingly good news on the housing front. Both building permits (1091K actual vs. 965K consensus) and housing starts (1066K vs. 960K) for June surpassed market expectation by a wide margin. However, one month data should not be considered as a trend. In fact, if yesterday’s record low home builder sentiment is any guide, we probably will see worsening housing condition in the months ahead. Finally, the Philadelphia Fed index came at -16.3 while economists were looking for a reading somewhere near -15, indicating contraction of manufacturing activities in that region for the eighth consecutive month.

The three major sectors that finished the session in red were exactly the same as yesterday. For those that missed yesterday’s comments, the names were energies, basic materials and utilities. Energies were dragged by another $5 plunge in crude price. The commodity has lost over 10% during the past sessions. Not surprisingly, the CRB commodity index posted a fourth consecutive decline by losing 2.7% in today’s trading. Financials were again the top performer in today’s trading. The positive earnings report from the largest US bank JP Morgan re-assured investors that yesterday’s Wells Fargo news was not one time wonder and there are still some good apples left in an otherwise rotten sector. The US dollar was mixed against most major currencies while treasuries were sold off as investors were fleeing away from the previously safe heaven. The VIX index was little changed today ahead of several key earnings. As tomorrow is the option expiry date, we should expect to see more volatilities given earnings surprises from Google and Microsoft after the bell.