Friday’s trading marked the fourth day of continual gains as investors further regain confidence in the Nation’s banking industry since Citigroup (C: 1.78, +0.11 (+6.59%)) and JP Morgan (JPM: 23.75, +0.55 (+2.37%)) announced a profitable first couple months this past Tuesday. Bank of America (BAC: 5.76, -0.09 (-1.54%)) also helped the markets by renouncing more governmental aid on Thursday. The Dow closed the day up 75 basis points, jumping over 9% for the week to 7,224, while the S&P 500 and the Nasdaq rose 0.77% and 0.38% respectively. This week’s gains were propelled by the healthcare sector as a merger between Merck (MRK: 27.07, +3.04 (+12.65%)) and Schering-Plough (SGP: 24.21, +1.89 (+8.47%)) advanced the entire industry up 3.77% on the day. This week’s 9 % gain marks the second-best performance this recession since the Dow gained 9.73% during the week ending on November 28. Markets around the globe also took an optimistic view of current economic conditions as major indices in Asia and Europe closed higher. Japan’s Nikkei index increased 5.15% as Japanese consumer confidence rose for the second straight month. The Hang-Seng also ended up 4.37%, but the Shanghai was one of few indices closing in the red at -0.24%. Stocks in Europe were also sent higher as the FTSE and CAC 40 rose 112 and 42 bps respectively on positive news around the world.
Oil prices fell -$1.30, or -2.76% to $46.25 as the dollar weakens against other currencies. Currently, the Euro to USD exchange rate is floating around $1.2932. The Yen also gained against the dollar today and is trading at ¥97.935. Gold prices ended the trading hours slightly up 73 basis points to $929.40.
The University of Michigan’s consumer sentiment report came out to be 56.6, higher than analysts’ predictions of 55.0, yet lower than the January’s sentiment number of 61.2. This increase helped investors remain optimistic over the current state of the economy, although most analysts and investors agree no bottom is present.
Bernie Madoff’s lawyers are filing an appeal to the judge’s decision to revoke his bail set at $10 million as he awaits sentencing on June 16th. Madoff is looking to face up to 150 years in jail after pleading guilty to 11 crimes in court on Thursday. Victims from Madoff’s Ponzi scheme crowded into the courtroom yesterday looking for reparations, though were not given any.
Top executives from General Motors (GM: 2.72, +0.54 (+24.77%)) met with 12 representatives in an effort to obtain aid of 3.3 billion euros ($4.3 billion) from the European Union to rescue their Opel division. GM may very well give up 50% ownership of this division to the EU if all goes according to plan. The EU doesn’t appear as eager as the US is in offering aid to a flawed business model, however, GM does appear to have some political support within the Union.
That’s all for today, catch us on Monday, same time, same place for the Bullish Banker’s Daily Market Recap.
-Derek Stevens
Disclosure: The mutual fund the author manages is long JPM.
