After the open… Stocks are soaring, commodities are crumbling. Quantitative easing has come to an end, having failed to trigger any one of 100 familiar doomsday scenarios, and this appears to be creating a sort of blowback against anything that was ever considered a hedge against such scenarios. The end of QE has cleared the way for a higher dollar, and it also appears to be magnifying the effect that the strengthening dollar is having on commodities. The S&P 500 is currently up 1%.
Japan is now following in America's footsteps, vis-à-vis monetary stimulus, and it the successful wind down of America's stimulus was almost certainly part of Japan's discussion, as it is no doubt a part of Europe's. Unfortunately for Japan and Europe, America's recovery was based on two things: printing money and striking oil. I don't think anyone can say whether the first would have worked in the absence of the second.
Meanwhile, GDP numbers this week were very good, but the fact that GDP is rising while income and spending are falling will likely re-kindle the old debate about just what GDP is or should be measuring, and suggests that America's economic problems are far from over. The market is always involved in various trends, but what's happening now feels more like an occurrence. The game has clearly changed from just two weeks ago, though we won’t know what the new rules are for some time yet.
Here are your Friday morning market metrics. Industries doing well today include Semiconductors, Auto Equipment and Electronic Equipment. Industries showing weakness include Gas Utilities, Electric Utilities and Multi-Utilities.
The VIX is down 1.6% to 14.41 after closing on Thursday at 14.52. The most active option strike this morning is Bank of America (BAC), with 9,155 October-31 17 puts changing hands. The put-call volume ratio is 0.81, (500,565/405,049). NYSE Adv/Dec 2,257/748. Nasdaq Adv/Dec 1,918/599.
Julian Close has been a business writer since the first day of the twenty-first century, having written for PRA International and the United Nations Department of Peacekeeping. He graduated from Davidson College in 1993 and received a Master of Arts in Teaching from Mary Baldwin College in 2011. He became a stockbroker in 1993, but now works for Fresh Brewed Media and uses his powers only for good. You can see closing trades for all Julian's long and short positions and track his long term performance via twitter: @JulianClose_MIC.