Markets knocking the stuffing out of the optimists
Treasurys are up after a stellar auction of $19 billion reopened 10-year notes, stocks are floundering as investors worry about the economy and earnings season. More and more it feels like the pessimists have decisively turned the tide.
David Gaffen over at the Reuters Global Investing blog, sums it up best:
Earnings are expected to fall about 36% once again, and investors in recent weeks have finally cottoned to the idea that vaulting over low bars really isn’t much to get optimistic about. If the market is truly going to turn higher, it will depend on the quality of earnings, and there, some aren’t so optimistic. Mike Lewitt, president of Harch Capital Management, said, “I don’t think there’s a lot of revenue growth, just shrinkage – basically everybody is shrinking across the board and that’s what we’re seeing.”
Treasury 10-year is up over 1 point to yield 3.28%. It was just a month ago that the world worried about a 4% yield and how it would derail an economic recovery.
The DJIA is off 0.43% at 8127 points. The S&P 500 was down 0.81% at 874 points. These levels haven’t been so low, at least at the close, since April.