The woes in the bond market continued today with the market falling once again. In the past two trading sessions, there was no economic news to cause the weakness. I told you a few days ago that foreign governments may be finding a viable alternative in China. Below is a lists of how the important bond components closed today.
30-Year T-Bond 4.796% +0.083% 10/26/05
10-Year T-Note 4.591% +0.083% 10/26/05
5-Year T-Note 4.460% +0.081% 10/26/05
2-Year Note 4.366% +0.035% 10/26/05
Bond investors continue to worry about inflation, the Fed and oil. I'm surprised no one factored in, or made comments about the China bond alternative.
For those of you who have been wondering what could possibly bring down a resilient real estate market, now you know. Like most bubbles, its the unforeseen events that cause all the havoc.
Oh, and how about all those hot shot investors out there that allowed crooks like banks and mortgage companies to sucker them into interest only adjustable loans? They have got to be feeling a little tight in the shorts about now. Just wait.Today, the two-year note hit the highest level since mid-2201, and the ten-year yield is at the highest yield since March. Ouch!
We have been alerting you about this possibility all year. I hope it helped.
ENERGY STOCKS
Oil stocks took it on the chin today despite record earnings. Crude oil rallied today, so that wasn't the problem. In fact, the entire energy complex was up across the board with the exception of natural gas.
Energies
Crude Oil (CLZ5) Dec 05 61.09 +0.43
Crude Oil (CLF6) Jan 06 61.52 +0.32
Crude Oil (CLG6) Feb 06 61.85 +0.26
Crude Oil (CLH6) Mar 06 62.06 +0.24
Gasoline Unleaded (HUZ5) Dec 05 1.6267 +0.0056
Gasoline Unleaded (HUF6) Jan 06 1.6597 +0.0081
Gasoline Unleaded (HUG6) Feb 06 1.6797 +0.0101
Gasoline Unleaded (HUH6) Mar 06 1.6927 +0.0116
Heating Oil (HOZ5) Dec 05 1.9013 +0.0027
Heating Oil (HOF6) Jan 06 1.9348 +0.0032
Heating Oil (HOG6) Feb 06 1.9448 +0.0042
Heating Oil (HOH6) Mar 06 1.9213 +0.0037
Natural Gas (NGZ5) Dec 05 13.684 -0.376
Natural Gas (NGF6) Jan 06 14.004 -0.366
Natural Gas (NGG6) Feb 06 13.884 -0.336
Natural Gas (NGH6) Mar 06 13.504 -0.266
We will not know for sure if energy stocks have begun a down trend until next week when Mutual Funds conclude their profit taking. My best guess is they will stabilize, and rally tomorrow or next week.
EARNINGS
Exxon (XOM): Reported earnings of $9.9 billion for the quarter. If you are wondering where your Disney World money went, now you know.
Marathon (MRO): Marathon's quarterly profit more than tripled on revenues of $17.25 billion from $12.32 billion a year earlier. the company earned $770 million, or $2.09 a share, compared with net income of $222 million, or 64 cents a share, in the third quarter of 2004. Analysts expected Marathon to earn $2.73 a share, but some disruptions from the hurricane hurt results. the stock was down -$3.80, to close at $57.28.
