· Bonds fall on fears of interest-rate hikes in 2010
· Wall Street rebounds late to end flat
· Oil eases on stronger dollar & soft equities market
· Ireland downgrade hits euro, U.S. dollar extends rally (Adds close of U.S. markets
Today, the closing bell delivered the following headline:
· Stocks closed in split fashion after a rather lackluster session Tuesday
On Monday, the U.S. dollar gained and U.S. government debt prices fell. On Tuesday Treasury notes rose on the heels of the government's record-tying auction of $35 billion in three-year securities. One day down, next day up!
If there is one theme so far this week, it has to be the dollar's rise and fall being matched with Oil's continued rise in price per barrel.
On Monday, Oil fell to almost $68 a barrel on the stronger dollar and weakness in U.S. and European stocks. Yet on Tuesday, The dollar declined which of course helped move crude oil contracts higher. Oil prices advanced 2.7% to settle at $69.92 per barrel; a high for 2009. This in turn helped oil equipment stocks climb 2.1% and oil drillers close 2.5%higher. If you have been paying attention, you may have noticed that Oil has more than doubled from the low price of $32.40 a barrel in December, coming from last year's July high price of $147.27. For awhile now we have addressed the issue of the weakening of the dollar and the rise in oil prices. While this may not be good for the general health of the US economy, as investors we must simply treat it as another signal. It is what it is!
On Monday, Nobel Prize-winning economist Paul Krugman said that the U.S. recession may end this year. This in turn prompted speculation that fuel demand will increase, which of course caused Oil prices...(you can finish the sentence).
Krugman, who during the day punches the clock as a PrincetonUniversity economist, also said the he wouldn't be surprised "if the official end of the U.S. recession ends up being, in retrospect, dated sometime this summer." Others chimed in with snippets like the following from Mark Pervan, a senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Melbourne who said, "Oil, being seen as a lead indicator, is one of the first things to go and I think things are set for recovery. The top-down picture is that the market is feeling the worst is behind it."
Still others commented that "We see persistent resilience in equities though all technical indicators suggest the market is overheating and should pull back," said Fumiyuki Nakanishi, a strategist at SMBC Friend Securities Co. in Tokyo. Almost acting surprised, he also daid "Investors' appetite for stocks is very strong."
And so there you have it. An interesting start to another interesting week.
More on Friday. 
