A Tough Time for Stocks
Jul 2, 2010
Posted by Jody Eisenman | Filed under Uncategorized
On June 21, The Dow Jones closed at 10,583. It had risen over 600 points in the prior two weeks, and looked ready to move higher. However, since then, the market has dropped almost every day to close today at 9732. The reasons for this have been the European Debt Crisis (discussed here several times), and fears of a “double dip” in the economy, but especially in the housing market. Despite the Fed Funds rate at virtually zero, and the hundreds of billions spent bailing out the banks, Fannie and Freddie, the autos, etc, the economy is clearly not recovering very quickly. In addition, the unemployment rate remains close to 10%. Meanwhile, treasury yields fell even further as investors flocked to safe havens. The 10 year US treasury dropped below 3%. The one year is now at 0.32. As tomorrow is the Friday before the July 4th weekend, I do not expect a major move. However, we might see a “dead cat bounce” in an equity market which has been falling rapidly.
