\n\tBy Greg Peel<\/p>\n
\n\tThe Dow closed up 143 points or 1.3% while the S&P finished up 0.8% to 1160 and the Nasdaq<\/span> closed down 0.4%.<\/p>\n \n\tStop the world I want to get off. There will be quite a few Wall Street traders having a quiet sit down right now hoping their inner ears will stop swaying. Intraday volatility has been dominant this week and last night was no exception – only more so.<\/p>\n \n\tThe Dow burst out of the blocks to be up 261 points in the first half hour on the back of both domestic and European news. Economists got the shock of their lives when the US weekly new jobless claims number showed a 37,000 plunge to 391,000 from 428,000 the week before. Not only is a number below 400k<\/span> seen as the point at which the unemployment rate can fall, forecasts had been for 417,000.<\/p>\n \n\tThere was great celebration from many, and a lot of head shaking from the cynics. These weekly numbers are always volatile and suggestions were that storm activity last week distorted the figures. But to add to the positive mood, the final revision of US June quarter GDP came in at 1.3% growth, ahead of 1.2% consensus forecast. This result matched the initial estimate and the previous revision showed only 1.0%.<\/p>\n \n\tNews from Europe was that the German parliament had passed the EFSF<\/span> bill without a hitch. Cyprus and Estonia also provided positive votes (phew), leaving only Holland, Slovakia and Malta to vote in October. Break out the Maltesers<\/span>. The German vote was obviously pivotal, albeit there was little doubt leading into the vote that the outcome would be a good one.<\/p>\n \n\tSo whether due to short-covering or over-excitement or both, Wall Street leapt from the open before running smack into the sellers. This is that pesky group who feel continuing European uncertainty and indecision mean we must still go lower before we can go higher. And sell it they did – so hard that the Dow was down 45 points just after 3pm<\/span>. Then for no particular reason, Wall Street turned once more and the Dow closed up by triple digits.<\/p>\n \n\tOne might be tempted to feel Wall Street is trying to find a bottom. Past sessions have seen rallies evaporate but clearly the buyers are still trying, and last night the buyers won out in the end. The only problem is that tonight sees the final session of the volatile September quarter, and portfolio rebalancing at this time from the big funds will always mislead. And then we hit October. It's not the historically weakest month on average – that's September – but October does still harbour<\/span> the ghosts of 1929, 1987 and 2008. We do have to be wary of those nasty fund redemption windows which open after the quarter's end, allowing frustrated and fearful investors to jump. Those windows caused all sorts of hell in 2008.<\/p>\n \n\tThe US dollar index was also moving around last night, in opposition to stocks. It closed down 0.2% to 77.89 while the Aussie is steady at US$0.9781. Gold had a quieter session, rising US$7.10 to US$1615.90\/oz, while silver rebounded 3% to US$30.67\/oz.<\/p>\n \n\tLondon base metals were also in a rebound mood on the back of the German news despite Wall Street looking weak at the LME<\/span> close. Copper rose 1.5% and gains of 1-3% were posted across the board. Brent oil was relatively steady at US$103.96\/bbl<\/span> while West Texas rose US93c<\/span> to US$82.14\/bbl<\/span>.<\/p>\n \n\tThe US bond market has settled down a bit now with the ten-year yield hovering just below the 2% mark. This week saw three rounds of successful auctions from the Treasury in twos, fives and sevens and record low settlement yields were once again set. After the market on Wednesday night, Ben Bernanke addressed a gathering organised<\/span> by the Cleveland Fed in which he suggested the central bank was still ready to respond with further monetary easing if economic growth remained anaemic<\/span> and inflation and inflation expectations fell. In other words, while Wall Street had been disappointed in Operation Twist, the Fed is not yet ruling out QE3<\/span>.<\/p>\n \n\tThe risk of falling inflation is not a long shot given the euro is struggling again and the US dollar has returned as the safe haven. A stronger dollar would ease upward commodity price pressures. And in what may be another precursor to a potentially weak quarterly reporting season in the US, Intel competitor Advanced Micro Devices last night issued an earnings guidance downgrade and drew subsequent recommendation downgrades from a number of brokers. That is why the Nasdaq<\/span> was the weak performer last night.<\/p>\n \n\tOn the subject of inflation, tonight will see the release of an alternative measure to the CPI amidst the monthly US personal income and spending data, along with the Chicago PMI and the fortnightly consumer sentiment measure.<\/p>\n \n\tThe SPI<\/span> Overnight was up 21 points or 0.5%.<\/p>\n \n\tThis weekend is a long one in some states but not all, meaning the ASX<\/span> is open on Monday and as such FNArena<\/span> will also be open as usual, godammit<\/span>. Note that clocks go forward for summer time on Sunday meaning that from next week Wall Street will close at 7am<\/span> Sydney time rather than 6am<\/span> as has been the case through winter. It's another month before the US goes off summer time at which point Wall Street will close at 8am<\/span>.<\/p>\n \n\t[Note: All paying members at FNArena<\/span> are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts in the Cockpit and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.]<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" The Dow gave up a 261 point to finish up 143, having been negative in between.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[84],"tags":[23,21,29,24,41,22,46,26],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/58919"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=58919"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/58919\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=58919"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=58919"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=58919"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}