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Transit Strike Ends, Markets Get Needed Lift - Money Matters for 12/22/05
With the announced end of the transit strike in New York, a strike which justifiably has dominated the news and events in the Big Apple and on Wall Street, traders breathed a quick sigh of relief and began buying in earnest in late afternoon trading.
The Dow, Nasdaq and NYSE piled onto gains from the morning, with all three indices finishing well into positive territory with one session remaining before the holiday break. With the markets closed on Monday in observance of Christmas, tomorrow should prove to be an interesting, and likely positive, day. The absolute last thing Wall Street wants to do is end the final session before Christmas on a downer. Unless there's some horrific economic news, even the most craven of Wall Street heels should be in cherry spirits tomorrow.
Scrooginess notwithstanding, the markets are attempting to climb the proverbial wall of worry as 2005 draws to a close.
Along with the end of the disruptive transit strike, investors were encouraged by a drop in new unemployment claims and an upbeat report from the Conference Board which saw its index of leading economic indicators rise by half a percent and consumer spending up 0.3% for November.
Those of us still rapt on the bond inversion front saw the trend continue into its 4th day as the 5-year treasury closed with a yield of 4.373, while the 2-year ended at 4.389, now nearly a full two basis points inverted.
As expected, the inverted yield curve failed to make a dent in the news, mainstream or financial. One can suppose that the nation or the people of the USA just don't want to hear any bad news during the holidays. Too bad, that, because it's here and as stated before, ad nauseum, by me and other commentators, the inverted yield curve has a nearly perfect record of predicting recessions.
A quick check on Google News for the words "inverted yield" produced only 252 relevant articles. Not much, if we're really in for an economic wallop in the coming months.
I should note that gold and silver were up smartly today, but likely will remain somewhat range bound over the next 3-6 weeks. After that their upward momentum is likely to continue for the next few years.
Dow Jones: +55.71; 10,889.44 close
NYSE Advancers: 2047
Nasdaq Advancers: 1906
NYSE New Highs: 101
Nasdaq New Highs: 114
Gold: +9.70; 505.00 close
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