Welcome To The New Normal?

The Dow again swung in a roughly 775 point range (about 9 percent), and yet the markets felt....stable.

But it's not stable, and it's not normal. Commodities got clocked again: oil at a new low, palladium down 10 percent, aliminium down 9, copper down 4.

Most importantly, gold was down 4 percent as hedge funds continued to liquidate even the "flight to safety" play of precious metals. This is a sign that sellers are still out...selling.

Financials again significantly underperformed the rest of the market.


There are some signs the municipal and corporate bond market might be getting easier:

--Calif. raises $5 billion

--PG&E doubled the size of its planned bond sale, from $300 m to $600 m

--Occidental Petroleumincreases size of its bond offering from $750 m to $1 b, and priced them today at Treasury plus 437.5 basis points.

1) Economic news. The economic news remains poor: industrial production was down 2.8 percent, the largest drop since 1974.

Combine this with yesterday's stats: 1) record low Empire Manufacturing Index, 2) 3-year low in retail sales, and what you have is a clear indication that the economy slowed notably in September.

2) Bank earnings today: poor, but not far from expectations. Citi,Merrill Lynch, PNC, and BB&T turned in numbers that, while far below a year ago, at least did not surprise dramatically on the downside.

I'm not trying to gild the lilly here. Citi, for example, lost money in credit cards, consumer banking, and investment banking. Credit costs and delinquencies rose, and writedowns continued. But it wasn't worse than the lowered estimates.

New from CNBC.com:

- The Dow 30 at a Glance


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