US equities continue to march higher with its sixth straight weekly gain as S&P500 was up 0.9% and finished on its highs at 1418 and is within a stone’s throw to the 2012 highs and once broken would look set to make new 4 year highs. NASDAQ posting a 2.1% gain at 2,780 for the week and a break on the 2800 level puts it at 12 year highs which are prices not seen since the tech bubble popped in 2000. Markets rallied on increased economic optimism. It the option space total Put/Call ratio of 0.737 suggests options plays favor bullish moves. Volatility on the CBOE VIX at 13.45 down 8.75% on the week and at levels not seen since 2007 as markets continue to add risk. The DJIA was up 0.5% at 13,275.
Yet again the Euro was up 0.3% at 1.2321 and with commodity currency the AUDUSD was down 1.3% at 1.0436 on news that the Treasury has said there is room for the RBA to cut rates some more. Other news in the currency markets come via Basel III that has suggested that banks are underestimating the risk attached to currency trading in the way of counterparty risk. Finally, traders are coming to terms that maybe the FED won’t pull the trigger on QE3 in early September. The Dollar index closed flat on the 82.663 on the week.
Crude saw another larger drawdown on oil inventories for the second week with -3.7m barrels versus analyst forecast of -2m draw and Brent rally 2% to 113.76 on the October 2012 contract. WTI was up 3% at 96.54 also on the October 2012 contract. RBOB unleaded gasoline futures closed up 0.3% at 3.0287. Natural Gas found some support up 0.8% at 2.732. Heating Oil finished up 2% to 3.0921 on the week. Gold finished the week down 0.4% at USD$1617.50 /oz in New York as volatility shrinks.
Technology Sector performed well with big cap names like Google +5.47%, Cisco +8.6% on the week.
Apple +4.25% as the iPhone 5 become the focus for investors, could be as early as next month.
EBAY up 6.5% and GAP Inc up 5.2% setting new 52 week highs as markets see some recovery in US retailer sales
Merck down 2.8% pulled the healthcare sector down and was the sector laggard as there are some reports that maybe the stock is overvalued.
Intel down 2% as news wires and news flow still talking about Warren Buffets sale of Intel shares