Daily Market Reports | Nov 15 2008
By Greg Peel
The Dow closed down 336 points or 3.8% while the S&P lost 4.2% and the Nasdaq 5%.
After the 500 point rally on Thursday it was always on the cards that Wall Street would give a bit back on Friday. If you measured the session up to 3.15pm it was very similar to Thursday in that a 350 plus fall to midday became a near 100 point rally around 3pm. But rather than kicking on in a flurry this time the sellers swept in. The bulk of the 336 fall at the close came in the last ten minutes.
What do we make of that? Not much. It was Friday, and as has been the case in recent weeks both in New York and in Australia no one is particularly keen to take positions home over the weekend. Late selling is the norm. And it occurred in a vacuum. The G20 meeting starts tonight and the sidelines seemed a safe place to be. Not that anyone expects any great achievement at the meeting. It’s just the beginning.
It was also the last session of trade before the November 15 hedge fund redemption cut-off, so that could explain some last-ditch selling. It’s not entirely clear just how significant the date is. Hedge funds will have received their last redemption notices but may still have to sell to satisfy the last of them. And while it is known that October saw record redemptions, it is not known to what extent the record represented positions held. We might do this all again in three months time.
The catalyst for the fall to midday was the October retail sales number, which fell 2.8%. That is a new record, the last being a fall of 2.6% in November 2001 following 9/11. While that sounds catastrophic it was not exactly a shock, and Wall Street turned its attention to buying once more. There were also sombre reports out from retailers Abercrombie and Fitch and JC Penney.
Elsewhere the US dollar was slightly higher and oil fell US$1.16 to US$57.04/bbl. But gold ignored the moves, adding another US$17.60 to US$745.60/oz. Traders suggest that whatever may eventually come from initial G20 discussions, it will likely be more positive than negative for gold.
Base metals also ignored the greenback by staging some mild rallies. Copper rose 4%.
The SPI Overnight fell 64 points.
