Binary Option Analysis – Stocks Tumble as European Bond Yields Surge

Sep 8, 2011
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Binary Options Trading analysis written by Bradley Welcher - BinaryOptionStrategy


Equities
Asian markets closed mixed, as the major indexes pared early losses. The Nikkei rose .2% to 8480, the Kospi rallied 1.1%, and the ASX 200 ticked up .3%. China’s markets closed lower, as the Shanghai Composite eased .2%, and the Hang Seng dropped .8%, weighed down by real estate companies.

European markets sank, as rising bond prices reinforced fears of contagion. The CAC40 tumbled 1.8%, the DAX fell 1.1%, and the FTSE slumped 1.6%. Spanish bond prices continued to drop, pushing yields on 10-year Spanish notes up to 6.975% in a government auction, with a weak bid-to cover ratio of 1.54.

The selling continued in the US, with the Dow dropping 135 points to 11771, the Nasdaq falling 2%, and the S&P 500 closing down 1.7% to 1216.

Children’s Place shares surged 15.1% on strong earnings results, and lifted its outlook. Sears dropped 4.6% after reporting a loss due to weak demand, and NetApp shares tumbled 12.3% after reporting a drop in profits.

Treasuries and Commodities
US bonds rose moderately, with 10-year notes up 10/32 to yield 1.97%, and 30-year notes up 29/32 to yield 2.98%. In Europe, German bonds sold off, with 10-year notes down .70 to yield 1.89%, and 30-year notes down 1.58 to yield 2.56%.

Commodities were hit by a steep selloff that pulled down nearly every entry on the board. Crude oil dropped 3.6% to 98.93, a day after breaking through the $100 barrier and gasoline futures tumbled 4.6%. An unexpected drop in natural gas storage sent natural gas up 3.2%, escaping the selling pressure.

Silver plunged 6.6% to 31.575, leading metals lower. Gold closed down 3.1% to 1719.60, and copper shed 3.4% to 3.367.

nov-18-silver.png

Silver Plunges 6.6% in a Broad Commodity Selloff

Corn dropped 4.4%, cotton fell 4%, and wheat sank 3.9% as agricultural futures joined in the slide.

Currencies
The Australian Dollar fell below the 1.000 parity level, closing down .8% to .9997, and the Yen rose .1% to settle below 77 at 76.98. The Canadian Dollar skidded .5% to 1.0289. The Euro closed up fractionally surrendering early gains, and the Pound gained .2% to 1.5754.

Economic Outlook
Thursday’s economic data was mostly positive. Weekly jobless claims dropped to their lowest level in 7-weeks at 388K, better than forecast. Building permits were higher than expected, while housing starts were in line with analyst expectations. On a weaker note, the Philly Fed manufacturing index unexpectedly dropped to 3.6 from 8.7.

Friday’s sole report will be leading indicators. Earnings are due from Heinz and Kirkland’s.