The Dow fell for the 7th day in a row dropping 90 points to 18,313 on heavy trading volume. While the Dow has fallen over the past week the NASDAQ has held steady but today snapped a 5 day winning streak. Oil stocks, which are on the Dow, have been lower while tech shares, which tend to be on the NASDAQ, have done better.
The interesting news today centered on Europe where stock exchanges in Germany, France, Spain and Italy all were led lower by falling share prices for banks. Barclays, Commerzbank, HSBC and Society Generale joined a consortium of banks to help underwrite a capital increase (bailout) for BMPS, one of Italy’s most troubled lenders. Shares of BMPS were down 11%. It seems the effort to bail out the Italian banking sector is gaining steam. Shares of Deutsche Bank hit a new intraday low as they continue a yearlong march downward.
While in Alaska the price of US WTI crude oil fell from $45 to $40. I was talking to a guy in Juneau who told me that Alaska had budgeted oil revenues based on an average price of $85 per barrel. The deficit in Alaska is now over $3.5 billion and the state is looking at all kinds of tax proposals to help close the gap. Despite all that the town of Skagway was much improved since the last time I was there and the streets of Juneau were packed with cruise ship passengers. WTI crude oil today finished at $39.62 a barrel.
Prices of gold has started to move higher again as investors look to hedge a possible increase in financial stress in Europe. When I left for Alaska, gold was $1,338 per ounce but today hit $1,372 up over $12 an ounce.
The Boy Scout trip to Alaska was a big success. The kids were tired, wet, cold and hungry which is as good as it gets. We followed the historic 1897 gold rush route as we hiked the Chilkoot trail in 5 days covering 33 miles from Skagway to Bennett, BC.