Your Wednesday Market Blip 12/21/16

Your Wednesday Market Blip 12/21/16

Overall trends in equity markets are bullish since the election however the Dow today fell 32 points today to 19,941. Heading into the Christmas weekend, trading volume is shrinking like a cheap suit in a rain storm as traders ease out of town to spend time with the family.

Existing home sales in the US continue to chug higher as contract closings rose 0.7% to 5.61 million on an annual rate reaching the fastest pace since February 2007. This is according to the National Association of Realtors which also noted the number came in above expectations. Median sales prices climbed 6.8% from November 2015 and now sit at $234,900. Inventories of available properties dropped 9.3% to 1.85 million. The overall message contained in the data was one of a strong housing market.

The world’s oldest bank is Monte dei Paschi in Italy and yesterday shares of the historic bank were slammed when management announced the bank could run out of money within 4 months. This surprised analysts after it was thought that they had sufficient liquidity for almost a year. The Italian govt however has said it will rescue the bank and in the process of doing so it will save Italian retail investors while simultaneously making a mockery of EU bank bailout rules. Italy will need to take on debt to make this happen but it is critical. A note of interest here is that US financial institutions like JP Morgan have been circling in Italy with the idea of helping craft a larger rescue plan for the Italian banking system. I am sure these guys are not working for free so any pain in Italy could be gain for US banks and PE sharks.

WTI crude oil reversed a recent rally and fell 1.5% today to close at $52.50 per barrel. The gurus had expected a stockpile drawdown of over 2 million barrels but instead ended up with a 2 million barrel inventory build. Natural gas surged 9.6% in price thanks to the mid-west cold snap and gold was unchanged on the day at $1,133 an ounce.

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