Enthusiasm Is Picking Up

Published by Filipe R. Costa on Fri, 17/08/2012 - 10:28
bull market

Daily Market Commentary for August 17: Investors are enthusiastic again to pick equities. European and US markets ended positive and the Dow was able to break above the 13,200 level that has been persisting since the beginning of this month. Will the euphoria last?

Well, finally we are seeing action that is not just yo-yo movements. Markets were able to pick up steam yesterday and rose continuously until the end of the session instead of going up and down to end in the same level.

Economic data reported in the US was mixed. Housing starts decreased to an annual pace of 746,000, a little below what was expected but building permits rose to 812,000, much above the mean consensus before the announcement. Jobless claims rose 2,000 to 366,000, in line with the consensus. The Philly Fed index dropped once again and more than anticipated confirming deteriorating manufacturing conditions. The drop boosted gold.

Market enthusiasm was certainly not driven by economic data as it was mixed, not bad, not good. Merkel’s words gave a new breath to investors as she corroborated Draghi’s words relating to the European Union willing to do everything possible to avoid a Euro collapse.

On a side note, Facebook continues to drop indefinitely. As the first lock in period expired, shares dropped bellow $20, making this IPO one of the worst for investors.

Name Last price Close Price % 5-Day % YTD %
IBEX 35 16/08/2012 7417.3 4.05 4.32 -13.41
FTSE MIB 16/08/2012 14930.25 1.87 1.89 -1.06
Crude oil (Light Sweet) Composite 16/08/2012 9526 1.03 1.83 -3.78
Nasdaq 100 Index 16/08/2012 2768.09 1.19 1.78 21.52
Nikkei 225 16/08/2012 9092.75 1.88 1.27 7.54
S&P 500 16/08/2012 1415.51 0.71 0.91 12.56
GBP/USD - US $ per £ 16/08/2012 1.5737 0.37 0.7 1.33
CAC 40 16/08/2012 3480.49 0.91 0.69 10.15
Dow Jones Industrial Average 16/08/2012 13250.1 0.65 0.64 8.45
EUR/USD - US$ per Euro 16/08/2012 1.2359 0.57 0.55 -4.59
DAX (Xetra) 16/08/2012 6996.29 0.71 0.45 18.61
Gold (LBM) $ 16/08/2012 161590 0.79 0.06 3.13
EUR/GBP - £ per Euro 16/08/2012 0.7853 0.19 -0.11 -5.75
FTSE 100 16/08/2012 5834.51 0.03 -0.29 4.71