U.S. stocks closed up on Friday (well most indices, the NASDAQ declined), after erasing early gain (a triple-digit jump in the Dow) and significant volatility heading into the close (quadruple witching), to end the week up and halt a six-week losing streak.

In the early trading, when the market was at the day’s peak, the areas of safety reigned again as utilities and consumer staples led the morning rally.  However, late in the session financials and telecoms took over as the session’s top-performing groups.  Tech, energy and basic materials closed down for the day.

Even as stocks rose, the CRB Index closed lower (rare occasion, but the correlation between stocks and commodities isn’t perfect) for a third-straight day.  The prices of coffee, crude and nickel pressure the index.  Crude is essentially back to that pre-MENA eruption period, ending the session at $93/bbl.  Wholesale gasoline was little changed at $2.95/gal.  A lot of people are talking about consumer relief here with gasoline down 15% from its April 29 peak, but with the national retail average at $3.68 I’m not quite buying it.  And any meaningful bounce in stocks surely means another rally for gasoline.

As we talked about on Friday, here comes the next kick the can down the road event.   The IMF will release funds to Greece even though they met few of the budgetary conditions that were required to get those funds.  This was followed by yesterday morning’s announcement that Germany’s Merkel will scrap German demands that bondholders absorb losses and the bailout will occur anyway.  European Finance Ministers actually called this a resolution; I guess much like the three previous “resolutions” in that it won’t resolve much.  But for now, all the market cares about is the thing has been delayed again.  But with each delay the time before fear arises again becomes shorter.

Market Activity for June 17, 2011

Sector Activity for June 17, 2011

University of Michigan Confidence

The UofM/Reuters gauge of consumer confidence unexpectedly fell (every weaker number seems to be unexpected these days) back to 71.8 in June from May’s 74.3.  Both the current and futures sub-measures of the survey pushed the overall index lower – the expectations side of things had the largest effect, not just because it accounts for 60% of the overall measure but because it posted a larger point loss than the current conditions aspect of the report did.

Overall though, these moved up or down over the past couple of years matter very little as the measure has gone nowhere since June of 2009 – it’s nicely above the massively depressed level of late 2008 but remains well below the long-term average.

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Have a great day!

Brent Vondera, Senior Analyst

Phone: 636-449-4900