Global Recovery
Stocks ended their eight day rally today as investors grow more concerned about the global recovery. As problems continue in Greece, investors are worried about the effect their debt problems could have on global markets. Greece's lack of ability to get its debt under control has shown in the markets over the past two months, causing spurts of selloffs. One thing that has come from Greece's problem is the rise of the U.S. Dollar; the dollar had been on quite the loosing streak until problems in the European country came about. Now, the greenback has pushed the euro past a two-week low. Another reason for the selloff came from Palm, who reported worse-than-expected profit results late Thursday. Shares of palm plummeted 18% Friday, sparking tech shares to also fall. With no economic reports released today, there was little to help boost investor's confidence. Yesterday the Dow Jones industrial average rose to new highs that haven't been hit since October 2008, the Dow, Nasdaq and the S&P 500 are all on pace to end the week with gains; this will be the fifth out of six weekly gains for all three. Trading volume was light today, as it also marked quadruple witching day. Quadruple witching can also cause sporadic patterns in stocks and much more volatility in the broader market. At the end of the trading session the Dow finished the day in the positive, commodity prices fell as the dollar continued its rise through the session. Gold fell $20.00 to $1,107.40 and crude oil fell $1.52 to $80.68.
Remarks by FDIC Chairman Sheila C. Bair to the 2010 ICBA Annual Convention; Orlando, Florida March 19, 2010:
This has been a season of challenges for the banking industry and our economy. The message we're hearing in Washington is this: Community banks are essential to the economy, but many of them are experiencing acute credit distress; Community banks are doing more than their share under difficult circumstances to provide the credit that will be needed to create jobs in the recovery; Community banks are looking for a balanced approach to supervision and regulation as they themselves walk a fine line in their lending policies; and Community banks support regulatory reform that finally ends Too Big To Fail and levels the playing field, but they rightfully oppose reforms that just heap more regulation on them. Economists tell us that the worst of the recession is behind us, yet we know that credit performance is a lagging indicator. You are still seeing the effects of the recession in your past-due and nonaccrual loans. Our latest Quarterly Banking Profile showed that noncurrent loans at FDIC-insured institutions reached a record high of almost 5.4 percent at year end. The credit crisis, which began on Wall Street, is now mostly being felt on Main Street. Your customers are feeling the effects of diminished cash flows and lower collateral values. And you are seeing your nonperforming loans continue to rise. Amid these ongoing events, some clear lessons stand out for all to see. First, the worst excesses that led to the credit crisis were not generated by community banks. To be sure, many community banks are highly dependent on commercial real estate and construction loans. And these concentrations did create a vulnerability to the credit crisis we have seen in mortgage and real estate markets during the past three years. Institutions that did not manage these risks are now experiencing high credit losses and, in many cases, lower supervisory ratings. But most of the risky subprime and nontraditional mortgages that fueled the housing bubble were not the work of community banks. They were the work of a highly complex, disjointed and depersonalized securitization process. By contrast, community banking is a relationship business, where character and creditworthiness both count, and where you take care of your customers because they are more than just a number to you. Small businesses create two thirds or more of all net new jobs. And they overwhelmingly rely on credit provided by community banks. Overall bank lending is down. Total loans and leases held by FDIC-insured institutions fell by 7.5 percent in 2009 – the steepest decline since 1942. Several factors are responsible for this, including weak demand from household and business borrowers a decline in the credit standing of many borrowers and tighter standards on the part of many banks. But the one group of banks that has proven to be the steadiest source of credit is community banks. During the final quarter of 2009, loans and leases at the largest banks – those with over $100 billion in assets – fell by 2.8 percent, or about seven times as much in percentage terms as the decline at community banks. These largest banking organizations accounted for more than 90 percent of the total drop in bank lending for the quarter. The smallest banks – those with assets less than $100 million – actually increased their loans by more than half of one percent. While so many big banks keep pulling back, you are hanging in there, doing your best to support the credit needs of our struggling economy. That deserves recognition in Washington, and all of our thanks.
Supervisory Guidance: As you know, the FDIC supervises almost 5,000 banks – mostly community banks. So we have a keen appreciation for the role you play in the economy and the challenges you have faced as the recession hit Main Street full force. In the Fall of 2008, at the height of the financial crisis, the FDIC took a leading role as the federal banking agencies issued a joint statement to the industry on meeting the needs of creditworthy borrowers. The statement pointed out that in the wake of the crisis our economy would become even more dependent on bank credit, and that it would be in everyone's interest for banks to make prudent lending a priority. In October, regulators again called attention to credit distress and credit availability with a new statement on commercial real estate loan workouts. The CRE guidance encourages banks to continue making good loans to commercial real estate borrowers—most of which are small businesses. It also encourages banks to work with borrowers that are experiencing difficulties in their repayment capacity because of economic conditions. And it emphasizes that restructured loans will not be subject to adverse classification by examiners solely because the value of the underlying collateral has fallen. Last month, the federal banking agencies and the CSBS issued a joint statement on lending to creditworthy small-business borrowers. The statement recognizes the importance of small businesses and the fact that some are experiencing difficulty in getting credit. It clearly states that financial institutions that extend credit using prudent lending standards will not be subject to supervisory criticism. I know that there are concerns about examiners being overzealous in adversely classifying loans and applying capital requirements. These are issues that we have discussed at length with our Community Bank Advisory Committee, which was created last year to conduct just this type of dialog. What I want you to understand is that we hear your concerns. We are trying very hard to achieve a balanced approach to supervision during these challenging times. There are no easy answers or quick fixes here, and we will need to work together to get through this as we've always done. Full article available http://www.fdic.gov/news/news/speeches/chairman/spmar1910.html
Economic data released today: N/A
At the NYSE closing bell on the New York Stock Exchange, here is how the major world indices and major U.S. stock indices ended the trading session on the world markets as well as the emerging markets including the stock market closing bell price:
DOW (Dow Jones Industrial Average) shed 37.41 points, EOD 10,741.76
NYSE (New York Stock Exchange) shed 56.70, EOD 7,386.87
National Association of Securities Dealers Automated Quotations (NASDAQ) shed 18.87 points, EOD 2,372.41
S&P 500 (SPX) shed 6.19 points, EOD 1,159.664
BEL 20 (BEL20) shed 15.74 points, EOD 2,639.28
CAC 40 (CAC40) shed 12.74 points, EOD 3,925.44
FTSE100 (UKX100) gain 7.51, EOD 5,650.13
NIKKEI 225 (NIK/O) gain 80.69 points, EOD 10,824.72
New York Stock Exchange (NYSE) stock market indicators for the trading session today:
Advanced stock prices 900, declined stock prices 2,194, unchanged stock prices 101, stock prices hitting new highs 258 and stock prices hitting new lows 8. NYSE quotes for volatile stocks and market trends, as well as stock quotes, stock prices and stock symbols of Day Trading Stock Picks on the New York Stock Exchange stock market for Day Trading online and active Day Trading for those who are or would like to be Day Trading for a living: POL gain 1.38, HOD 10.46, LOD 9.45, EOD 10.32; POT shed 1.86, HOD 123.85, LOD 119.80, EOD 121.02; FAS shed 2.13, HOD 95.21, LOD 91.50, EOD 92.34; CME gain 0.75, HOD 314.99, LOD 309.62, EOD 311.64.
National Association of Securities Dealers Automated Quotations (NASDAQ) stock market indicators for the trading session today:
Advanced stock prices 1,053, declined stock prices 1,671, unchanged stock prices 102, stock prices hitting new highs 172 and stock prices hitting new lows 19. NASDAQ quotes, volatile stocks and market trends, as well as stock quotes, stock prices and stock symbols of Day Trading Stock Picks on the NASDAQ stock market for Day Trading online and active Day Trading for those who are or would like to be Day Trading for a living: MSTR gain 4.25, HOD 90.41, LOD 87.89, EOD 89.27; SPWRA shed 3.08, HOD 20.17, LOD 18.62, EOD 18.96; SOMX shed 0.96, HOD 10.60, LOD 8.20, EOD 8.25; BIDU gain 4.99, HOD 583.80, LOD 568.50, EOD 569.65; FFIV shed 2.56, HOD 63.29, LOD 60.86, EOD 61.75; PCLN shed 3.80, HOD 224.61, LOD 238.47, EOD 239.01; AAPL shed 2.40, HOD 225.24, LOD 221.23, EOD 222.24.
Market trends on the American Stock Exchange (AMEX) and stock market indicators for the trading session today:
Advanced stock prices 215, declined stock prices 297, unchanged stock prices 36, stock prices hitting new highs 14 and stock prices hitting new lows 3.
Chicago Board of Trade Futures Market for the day, at time of this posting:
E-mini S&P 500 (ES) Mar 10: EOD 1154.75; Change -6.50
E-mini NASDAQ-100 (NQ) Mar 10: EOD 1,928.50; Change -13.25
E-mini DOW $5 (YM) Mar 10: EOD 10,675; Change -42
E-mini S&P MidCap 400 (MF) Mar 10: EOD 781.90; Change -8.00
Nikkei 225 (Yen) Mar 10: EOD 10,670; Change -55
World Currencies for the Forex Market, for Forex Trading by active Forex Traders, at time of this posting:
Euro 0.7387 to U.S. Dollars 1.3500
Japanese Yen 90.4750 to U.S. Dollars 0.0111
British Pound 0.6659 to U.S. Dollars 1.5000
Canadian Dollar 1.0165 to U.S. Dollars 0.9836
Swiss Franc 1.0600 to U.S. Dollars 0.9433
COMMODITY MARKETS:
Energy Sector - Nymex:
Light Crude (April 10) shed $1.52, EOD $80.68 per barrel ($US per barrel)
Heating Oil (April 10) shed $0.04, EOD $2.08 a gallon ($US per gallon)
Natural Gas (April 10) gain $0.08, EOD $4.17 per million BTU ($US per mmbtu.)
Unleaded Gas (April 10) shed $0.04, EOD $2.26 gallon ($US per gallon)
Metals Markets - Comex:
Gold (April 10) shed $20.00, EOD $1,107.40 ($US per Troy ounce)
Silver (April 10) shed $0.39, EOD $17.02 ($US per Troy ounce)
Platinum (April 10) shed $22.40, EOD $1,607.10 ($US per Troy ounce)
Copper (April 10) shed $0.02, EOD $3.36 ($US per pound)
Livestock and Meat Markets - Chicago Mercantile Exchange (cents per lb.):
Lean Hogs (April 10) gain $0.47, EOD $73.35
Pork Bellies (April 10) gain $0.50, EOD $91.50
Live Cattle (Aril 10) gain $0.45, EOD $97.98
Feeder Cattle (April 10) gain $0.17, EOD $104.80
Other Commodities - Chicago Board of Trade (cents per bushel):
Corn (May 10) shed $1.50 , EOD $374.50
Soybeans (May 10) gain $2.25, EOD $961.75
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